Updated: June 25, 2021
Instagram has evolved from a mere personal space for posting pictures and videos into a massive platform that connects over 800 million monthly active users. Over the past five to ten years, many of these users have found ways to capitalize on the outreach that Instagram affords by starting businesses through the site itself. From fashion bloggers and social media influencers to aspiring entrepreneurs, Instagram has created a unique nesting ground of profitable opportunities for individuals and businesses alike. As with any other medium, though, businesses should be aware of some potential legal risks involved with engaging in a for-profit trade on Instagram.
1) Create a legal entity and register your marks
If you start a business on Instagram and your account gains traction, you might decide to sell advertisement space, products and services, or host paid giveaways through your posts. Regardless of how you choose to use your account, you should begin your business plan with the formation of a limited liability legal entity; such as an Incorporation or a Limited Liability Company. The reason is very simple: a legal entity helps to limit your personal liability (hence the name) and protect your personal assets in the event a legal dispute arises stemming from the operation of your business.
Consider this scenario: you, through your legal entity, enter into a business agreement with another party. One of you breaches the agreement and the other pursues legal action. With such an entity in place, judgment creditors could potentially only go after the assets of the entity to satisfy a judgment from the suit. Alternatively, if the same events occurred, but you signed the agreement as yourself, and not as a properly formed and run entity, creditors could possibly use your personal assets to satisfy the same judgment.
Furthermore, it’s equally important to trademark your logo or slogan because they distinguish you and could be the first aspect of your brand that Instagram users associate with your account.
2) Disclose paid ads and partnership
You might not be an influencer or a celebrity, but you should still be careful about advertising on your Instagram page, especially if you are receiving compensation. Instagram has taken very seriously the problem of deceptive advertising on its platform after the Federal Trade Commission (FTC) required disclosure whenever a Material Connection with another individual or company exists. In order to comply with the new guidelines issued by the FTC, you should always use #sponsored or #paid, or make your own #XYZpartnership hashtag for your sponsored Instagram posts, ideally in your caption. Hiding those hashtags in the comment section will most likely cause you legal repercussions since it does not immediately put other users on notice. If you don’t really like the idea of using a hashtag, the only other alternative to meet the requirement for clear and conspicuous disclosure is to write a very clear caption in your post, where you disclose your partnership to other users. Simply tagging another individual, company or product is not enough and might get you in trouble as well.
3) Follow Credit and Copyright Rules
Generally, someone may be in violation of U.S. copyright laws when they use another’s photos or videos without receiving prior written consent. To best ensure that you do not, the best practice to avoid copyright infringement claims against you is to ask permission directly to the copyright owner, either through direct message or in the comment section.
However, you’re unlikely to get an answer from any celebrities or big Instagram accounts. In that case, Instagram allows you to use someone else’s content under the condition that you properly give credit to the account or use apps designed for reposting photos and videos that automatically gives credit to the original copyright owner, such as Regram.
4) Avoid Instagram BOTS: they’re illegal and can get you in serious troubles
Instagram bots are the virtual version of PhD in sports and Instagram is taking a hard line over this problem. Here is what Instagram says about using automated means:
“We prohibit crawling, scraping, caching or otherwise accessing any content on the Service via automated means, including but not limited to, user profiles and photos (except as may be the result of standard search engine protocols or technologies used by a search engine with Instagram’s express content).”
If you use a bot and Instagram detects it, your account will be automatically deleted. There are no legal repercussions, meaning that Instagram will not pursue any sort of legal claims for violating its Terms of Service, but it’d be impossible for you to get your account back. Interestingly, Instagram is allowed not to give you any warnings; in fact, Instagram has the sole discretion to remove your account at any time and for any reason it might deem appropriate.
“We may, but have no obligation to, remove, edit, block, and/or monitor Content or accounts containing Content that we determine in our sole discretion violates these Terms of Use.”
If you use or planning to use bots, be mindful that you’re violating an agreement between you and Instagram. Whether you have a one-thousand or one-million followers, you can immediately lose your business and all the hard work you put in if Instagram’s system to uncover illegal bots gets you on its radar.
5) Draft the right agreements
As discussed in the previous section, Instagram can remove your account any time they detect a potential violation, although the internet is full of stories about accounts permanently removed for no legitimate reason. Even worse, your account might get hacked or temporarily disappear due to a “bug”, something that can be analogized to a computer virus. Therefore, your agreements with other individuals or companies shall reflect these unforeseen happenings.
It is helpful to hire the right lawyer who will insert language in your agreements that can maximize your protection, avoiding expensive and time-consuming legal disputes in the future.
