The new Terms of Service agreement included clauses that referred to the company’s new powers to sell users’ photos without warning or compensation, reported RT.
New clauses also said that users waived their rights to participate in class-action lawsuits against the company.
A strong backlash, including a blizzard of news coverage, made the company relent and issue a statement of apology.
The company agreed to reword the terms and delete some of the more controversial language.
Instagram did, however, retain the clause forbidding arbitration as well as ads with user content, said TechCrunch.
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The lawsuit was filed by the San Diego-based law firm Finkelstein & Krinsk on behalf of Instagram user Lucy Funes and others.
The plaintiffs in the suit claim that Instagram breached their contract with users as the only way to get out of the terms is to deactivate the service altogether.
Users are also forced to forfeit the rights of photos they have already posted.
According to CNN, the lawsuit claims: ”In short, Instagram declares that possession is nine-tenths of the law and if you don’t like it, you can’t stop us.”