How to Avoid Losing 25% of Your Customers Overnight

According to a recent report, Instagram lost nearly 25% of its users (as tracked by AppData) nearly overnight. The cause is believed to be due to a very unpopular change to its Terms of Service. Prior to this, Instagram was one of the most popular and fastest growing social media sites. 

Many companies overlook the importance of terms of service. They are, and always have been, critically important from a legal perspective. But so too are they important from a customer relations perspective as the Instagram incident illustrates. Many companies (and their lawyers) bank on the fact that most users do not read the terms of service. The problem with this approach is that some users DO read them. And more frequently, consumer watchdog groups do as well.

When someone flags a problem or change as occurred here, then the issue goes viral in a hurry. Ironically, the same advantages of the virality of social media that helped Instagram with its meteoric growth, were disadvantages when this news broke and apparently lead to an immediate 25% decline in users.

This is not the first company, and likely will not be the last, to have a fiasco due to issues with its terms of service and/or privacy policy. If you want to avoid being one of these companies, do it right! Get solid legal advice on your TOS and Privacy Policy and make good business choices that do not offend your customers. Contact us for additional information.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Pillsbury’s Social Media & Games Law Blog | Attorney Advertising

Written by:


Pillsbury’s Social Media & Games Law Blog on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:

Sign up to create your digest using LinkedIn*

*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.