In announcing revised terms of service last week, Instagram spurred suspicions that it would sell user photos without compensation. It also announced a mandatory arbitration clause, forcing users to waive their rights to participate in a class action lawsuit except under very limited circumstances.
Instagram founder and CEO Kevin Systrom later retreatet partially, deleting language about displaying photos without compensation.
However, Instagram's new terms will allow the company to place ads in conjunction with user content and will keep the mandatory arbitration clause.
Instagram said it would "vigorously" fight the complaint.