League, players continue to talk as deadline looms

The National Hockey League and locked out players appeared closer to a new labor deal that would salvage a partial season after Wednesday's midnight deadline passed without the union filing a disclaimer of interest and dissolving.
With the lockout reaching its 110th day, negotiations began under an NHL Players Association (NHLPA) threat to decertify, freeing individual players to file anti-trust lawsuits against the league.
NHL commissioner Gary Bettman told reporters that the union never played the disclaimer card during any negotiations and that both parties and a U.S. mediator would be back at the bargaining table at 10 am ET (1500 GMT) on Thursday.
"The word disclaimer has yet to be uttered to us by the players association," Bettman told reporters as he left meetings at the league's Manhattan offices. "When you disclaim interest as a union you notify the other side.
"We have not been notified. It has never been discussed so there is no disclaimer."
While one deadline passed, another is looming large on the horizon, Bettman having set a January 19 limit for the puck to drop on a shortened 48-game schedule.
With the clock ticking, both Bettman and NHLPA chief Donald Fehr could agree on one thing - that much work needs to be done if there is to be a season.
"If you have a river to cross you have to build a bridge or do something else if you are going to cross the river," said Fehr, deflecting any questions about the disclaimer of interest. "We've moved closer on some issues but work remains to be done."
The two sides have spent three days in New York exchanging proposals and counter proposals and appeared to inching slowly towards a deal.
PENSION ISSUE
The back-and-forth diplomacy continued on Wednesday, with brief meetings in the morning and a longer session that began at 8 pm stretching into Thursday morning.
There have been indications the two sides are close to agreement on major issues - such has how to split $3.3 billion in revenue - contract lengths and revenue sharing but they remain far apart on others.
Player pension plans and how they are funded has suddenly popped up as the hot topic along with where the salary cap ceiling should be set.
The league wants a cap locked in at $60 million while the players are believed to be seeking something in the $65-67 million range.
"It's been a long day with lots of meetings both internal and with the players association, and the process will be continuing tomorrow morning," Bettman said.
"There has been some progress but we are still apart on a number of issues, but as long as the process continues I am hopeful.
"On some issues we agreed, on some we moved towards each other and on some we said 'no'. I think that applies to both parties."
Players have been locked out since mid-September and the league has cancelled games up to January 14, more than 50 percent of the regular season which was scheduled to start in October.
The dispute is the NHL's fourth work stoppage in 20 years and first since a lockout forced the cancellation of the entire 2004-05 season.

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NHL negotiations go late. No union disclaimer

 Hockey players are sticking together as a union for now and are working long and late hours with the NHL to try to reach a new collective bargaining agreement to get the game back on the ice.
The sides met in small groups throughout the day Wednesday and then held a full-scale bargaining session with a federal mediator at night that lasted nearly five hours and didn't wrap up until about 1 a.m. Thursday.
They planned to get back at it less than 10 hours later.
The biggest detail to emerge from Wednesday night's marathon talks was that Donald Fehr is still the executive director of the players' association, which passed on its first chance to declare a disclaimer that would dissolve the union and turn it into a trade association.
Last month, players voted overwhelmingly in favor of giving the union executive board the right to declare the disclaimer, but that permission expired at midnight Wednesday. The disclaimer would allow individual players to file antitrust lawsuits against the NHL.
Fehr wouldn't address the issue at all, calling it an "internal matter," but NHL Commissioner Gary Bettman said all the union would need to do is inform the league that it was taking the action for it to happen.
"The word disclaimer has yet to be uttered to us by the players' association," Bettman said. "It's not that it gets filed anywhere with a court or the NLRB. When you disclaim interest as a union, you notify the other side. We have not been notified and it's never been discussed, so there has been no disclaimer."
Even though the deadline expired, a new vote by players can be held anytime to restore the authorization.
"All I can tell you about that is the players retain all the legal options they have always had and we don't talk about legal matters," Fehr said.
The thought was that the union wouldn't take action Wednesday if it saw progress was being made. Neither side would characterize the talks or address what, if any, movement toward common ground was reached.
Both the league and the players were tightlipped about how many things still need to be worked out and what topics are keeping them apart. But the discussions went well enough for the NHL and the union to agree to the mediator's request to start talking again at 10 a.m. Thursday.
"I'm not going to get into the details," Bettman said. "There's been some progress but we're still apart on a number of issues. As long as the process continues I am hopeful."
Bettman has told the union that a deal must be in place by Jan. 11 in order for a 48-game season to be played beginning eight days later.
The night session Wednesday began shortly after 8 p.m. EST. The sides also met for about an hour during the afternoon when the union gave its latest proposal to the league, a response to the NHL's counteroffer on Tuesday.
Neither side said much regarding Wednesday's discussions, but it is believed that the pension issue has become a major stumbling block.
"The pension plan is a very complicated issue," Bettman said. "The number of variables and the number of issues that have to be addressed by people who carry the title actuary or pension lawyer are pretty numerous and it's pretty easy to get off track.
"That is something we understand is important to the players."
The union's proposal Wednesday makes four offers between the sides since the NHL restarted negotiations Thursday with a proposal.
A small group meeting on the pension issue was held Wednesday morning before the players' association presented its offer. A deal can't be done without a resolution on pensions.
The league presented the players with a counteroffer Tuesday night in response to one the union made Monday.
The lockout reached its 109th day Wednesday, and Bettman has said that the league told the union a deal needs to be in place by next week so a 48-game season can begin on Jan. 19. All games through Jan. 14 along with the All-Star game have been canceled, claiming more than 50 percent of the original schedule.
Fehr believed an agreement on a players-funded pension had been reached before talks blew up in early December. That apparently wasn't the case, or the NHL has changed its offer regarding the pension in exchange for agreeing to other things the union wanted.
The salary-cap number for the second year of the deal — the 2013-14 season — hasn't been established, and it is another point of contention. The league is pushing for a $60 million cap, while the union wants it to be $65 million.
In return for the higher cap number players would be willing to forgo a cap on escrow.
"We talk about lots of things and we even had some philosophical discussions about why particular issues were important to each of us," Bettman said. "That is part of the process."
The NHL proposed in its first offer Thursday that pension contributions come out of the players' share of revenues, and $50 million of the league's make-whole payment of $300 million will be allocated and set aside to fund potential underfunding liabilities of the plan at the end of the collective bargaining agreement.
Last month, the NHL agreed to raise its make-whole offer of deferred payments from $211 million to $300 million as part of a proposed package that required the union to agree on three nonnegotiable points. Instead, the players' association accepted the raise in funds, but then made counterproposals on the issues the league stated had no wiggle room.
"As you might expect, the differences between us relate to the core economic issues which don't involve the share," Fehr said of hockey-related revenue, which will likely be split 50-50.
The NHL is the only North American professional sports league to cancel a season because of a labor dispute, losing the 2004-05 campaign to a lockout. A 48-game season was played in 1995 after a lockout stretched into January.

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UPDATE 1-NHL-League, players continue to talk as deadline looms

* Deadline to start season looming
* Lots of work remains to save season (Adds detail, quotes)
Jan 2 (Reuters) - The National Hockey League and locked out players appeared closer to a new labour deal that would salvage a partial season after Wednesday's midnight deadline passed without the union filing a disclaimer of interest and dissolving.
With the lockout reaching its 110th day, negotiations began under an NHL Players Association (NHLPA) threat to decertify, freeing individual players to file anti-trust lawsuits against the league.
NHL commissioner Gary Bettman told reporters that the union never played the disclaimer card during any negotiations and that both parties and a U.S. mediator would be back at the bargaining table at 10 am ET (1500 GMT) on Thursday.
"The word disclaimer has yet to be uttered to us by the players association," Bettman told reporters as he left meetings at the league's Manhattan offices. "When you disclaim interest as a union you notify the other side.
"We have not been notified. It has never been discussed so there is no disclaimer."
While one deadline passed, another is looming large on the horizon, Bettman having set a Jan. 19 limit for the puck to drop on a shortened 48-game schedule.
With the clock ticking, both Bettman and NHLPA chief Donald Fehr could agree on one thing - that much work needs to be done if there is to be a season.
"If you have a river to cross you have to build a bridge or do something else if you are going to cross the river," said Fehr, deflecting any questions about the disclaimer of interest. "We've moved closer on some issues but work remains to be done."
The two sides have spent three days in New York exchanging proposals and counter proposals and appeared to inching slowly towards a deal.
PENSION ISSUE
The back-and-forth diplomacy continued on Wednesday, with brief meetings in the morning and a longer session that began at 8 pm stretching into Thursday morning.
There have been indications the two sides are close to agreement on major issues - such has how to split $3.3 billion in revenue - contract lengths and revenue sharing but they remain far apart on others.
Player pension plans and how they are funded has suddenly popped up as the hot topic along with where the salary cap ceiling should be set.
The league wants a cap locked in at $60 million while the players are believed to be seeking something in the $65-67 million range.
"It's been a long day with lots of meetings both internal and with the players association, and the process will be continuing tomorrow morning," Bettman said.
"There has been some progress but we are still apart on a number of issues, but as long as the process continues I am hopeful.
"On some issues we agreed, on some we moved towards each other and on some we said 'no'. I think that applies to both parties."
Players have been locked out since mid-September and the league has cancelled games up to Jan. 14, more than 50 percent of the regular season which was scheduled to start in October.
The dispute is the NHL's fourth work stoppage in 20 years and first since a lockout forced the cancellation of the entire 2004-05 season.

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FDA Moves on New Food Safety Rules

The FDA proposed new rules today that would require US food distributors to implement additional measures to combat food-borne illness. The guidelines are aimed at improving food handling in both the agriculture and manufacturing sectors after a series of recent disease outbreaks in peanuts, cantaloupe, cheese, and leafy green vegetables that killed scores of Americans.
Food safety organizations welcomed the new rules after a long delay.
“Under the old rules, we’ve been reacting to food contaminations after they happened,” Ami Gadhia of Consumers Union said in a statement. ”The goal here is to prevent deadly outbreaks before people get hurt.  We’re anxious to dive deep into these proposed rules so we can review and comment on the details.”
One rule would require growers, manufacturers and distributors to develop formal plans for preventing contamination, including techniques for cleaning equipment and keeping animals out of crops. Mandatory contingency plans for outbreaks would also be required of businesses, to be approved by the government. The rule would apply to both foreign and domestic suppliers, provided their goods are bound for US consumption.
Another rule proposes enforceable safety standardization in the production and harvesting of produce.
According to the Centers for Disease Control, 3,000 Americans died last year from food-borne illnesses, with an additional 130,000 hospitalized.
In an effort to stave off industry protests Food and Drug Administration officials stressed the rules would be implemented on a risk-based scale, with higher emphasis placed on foods intended to be eaten raw. For example, fresh tomatoes bound for supermarket produce aisles would be held to much stricter standards than beans intended to be cooked and canned.
The FDA estimates it will take roughly a year for the government to move toward implementing the rules, including a 120-day period for public comment. After adoption the largest agriculture businesses will have two years to comply, and small-scale producers will have extensions well beyond that time frame.
Most American food distributors are already in compliance with many of the regulations set out today, but many are voluntary and the government believes stricter enforcement could have prevented deaths from recent highly publicized outbreaks. For example, during the 2011 listeria outbreak in cantaloupes federal investigators found dirty processing equipment and standing pools of old water on the floor of the Colorado farm that produced them. The contaminated produce was linked to 33 deaths.
But these measures are part of the Food Safety Modernization Act, a sweeping series of regulatory changes to the industry that have been tied up in the Obama administration for well over a year. As the first major overhaul of the FDA in decades, President Obama signed the legislation into law with modest Republican support from Congress two years ago to the day, with a one-year deadline to see its first policies put into practice.
Speculation of political motivations at work cropped up during the delays, fueled after the rules were hung-up at the Office of Management and Budget in the review process. Some industry watchers suggest the administration may have sought to deny Republicans an additional talking point during an election year by tabling new proposals.
Pew Research reports there have been 15 major outbreaks regarding FDA-related products since the FSMA was signed into law, resulting in 40 deaths.

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Canada meets key aboriginal demand amid blockades

OTTAWA (Reuters) - Canada's prime minister will meet with native leaders next week to discuss social and economic issues, an olive branch to an angry aboriginal movement that has blockaded rail lines and threatened to close Canada's borders with the United States.
Stephen Harper made no mention of the aboriginal protests in a statement on Friday announcing the January 11 meeting.
But the meeting is a key demand from native Chief Theresa Spence, who has been on a hunger strike for 25 days on an island within sight of the Canadian Parliament in Ottawa.
Spence's spokesman Danny Metatawabin told reporters, on the snowy ground outside her traditional teepee, that she would continue her hunger strike until she was satisfied with the outcome of next week's meeting.
Spence's hunger strike has been one of the most visible signs of a protest movement called Idle No More, which had announced plans for blockades on Saturday all along the U.S.-Canadian border.
It was not clear if these blockades would now be called off, or if there would be any disruptions at the border crossings between the two big trading partners.
The movement is not centrally organized, and Metatawabin said he would not tell others what to do. Several hours after Harper's announcement, the Idle No More website still had a call up for blockades on Saturday.
Demonstrators blocked a Canadian National Railway Co line in Sarnia, Ontario, for about two weeks until Wednesday, and there were shorter blockades elsewhere in the country, including one that delayed passenger trains between Montreal and Toronto for several hours on Sunday.
Harper said next Friday's meeting would address economic development, aboriginal rights and the treaty relationship between the government and native groups. He described it as a follow-up to a meeting with aboriginal leaders last January as well as talks in November with Assembly of First Nations National Chief Shawn Atleo.
"While some progress has been made, there is more that must be done to improve outcomes for First Nations communities across Canada," Harper said in a statement.
DISMAL CONDITIONS
Many of Canada's 1.2 million aboriginals live on reserves where conditions are often dismal, with high rates of poverty, addiction and suicide.
Treaties with Ottawa signed a century ago finance their health and education in a way that many experts say is now dysfunctional.
Speaking to reporters in Oakville, Ontario, Harper sidestepped a question on whether he had agreed to the meeting because of Spence's hunger strike and fear the protests could snowball like last year's Occupy Movement.
Asked about the demonstrations, he said: "People have the right in our country to demonstrate and express their points of view peacefully as long as they obey the law, but I think the Canadian population expects everyone will obey the law in holding such protests."
Idle No More was sparked by legislation that activists say Harper rushed through Parliament without proper consultation with native groups and which affects their land and treaty rights. But it has broadened into a complaint about conditions in general for native Canadians.
In her meeting with reporters after Harper's announcement, Spence said she planned to attend the meeting in person along with three of her supporters and she wanted the governor general - Queen Elizabeth's representative - and the Ontario premier to attend as well.
She stood flanked by her daughter and several supporters, some of them holding up feathers. There were several minutes of drumming and singing before she and her spokesman began talking.
When asked what she needed to hear from the prime minister in order to start eating again, she said, "a positive result because there's a lot of issues we need to discuss" and that they should discuss the issues as equal partners.

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Competition affects who gets a liver transplant

NEW YORK (Reuters Health) - More competition between medical centers that perform liver transplants may mean sicker patients get lower-quality donor organs, a new analysis suggests.
When more than one center has patients on the same donor list, the centers have an incentive to get organs for as many of their own patients as possible, researchers explained.
So doctors are more likely to take the first available organ when their patient is at the top of the transplant list - whether or not that pairing has the best chance to succeed - rather than risk the organ will go to another center.
"There is the question whether competition decreases the ability of a center to better match donor and recipient characteristics," Dr. John Paul Roberts from the University of California, San Francisco and his colleagues wrote.
They analyzed data on more than 38,000 liver recipients who had transplants from non-living donors between 2003 and 2009.
The transplants were done at 112 medical centers in 47 so-called distribution areas - some that were covered by only one center and some that fed organs to multiple transplant centers.
Roberts and his colleagues found "clinically important differences" showing patients who received organs were initially worse off, with a higher risk of dying or having their transplant fail, in areas that had more medical centers in competition for the same organs.
For example, 10 percent of patients who received organs at centers with no competition had the worst scores for liver disease severity pre-transplant, compared to more than 28 percent of those in the high-competition distribution areas.
Areas with high competition also transplanted more organs that were considered at higher risk of failing, according to the new findings published in the journal Liver Transplantation.
Although that might not be the best way of distributing organs on a society-wide scale, it could be considered a plus for the people who otherwise wouldn't get an organ or for livers that would otherwise be considered too low quality and be discarded.
"If you're a sick, high-risk patient… then it's in your interest that somebody will take more of a risk on you. The alternative is not surviving," said Dr. Michael Charlton, a liver disease researcher from the Mayo Clinic Transplant Center in Rochester, Minnesota.
Competition, he said, does increase access for patients. So people who are very sick and are turned away by a center that's the only place for transplants in its distribution area might have better luck elsewhere - if they can afford to travel, that is.
"The practice, in terms of choosing patients who can undergo liver transplantation and accepting organs that are already listed for transplantations, varies significantly between centers," Charlton, who wasn't involved in the new study, told Reuters Health.
Still, he cautioned that the way the researchers measured competition - comparing the market shares for each transplant center in a given area - doesn't account for the effect of a center's reputation for good outcomes, for example.
In that situation, a popular, higher-volume center would experience less competition from other centers and might also have better transplant records - so pure competition might not be the only explanation for outcomes.
Charlton pointed to the Scientific Registry of Transplant Recipients as a place where patients can go to see how many people various centers have on their organ waitlist in addition to how well their patients do after getting a transplant. (For liver transplants, that information can be found here:).

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HBO to make adaption of AIDS play

Julia Roberts and Mark Ruffalo will star in an HBO movie adaptation of "The Normal Heart," the play about the onset of the AIDS crisis in New York City in the early 1980s.
HBO said Friday that Ryan Murphy, maker of "Eat Pray Love" and the TV show "Glee," will direct the film.
Larry Kramer's play about the men who joined him to help form the Gay Men's Health Crisis debuted in 1985 and was brought to Broadway again in 2011, winning a Tony Award for best revival.
Roberts will portray Dr. Emma Brookner, a paraplegic doctor who treated several of the earliest AIDS victims. Ruffalo plays Ned Weeks, who sought answers when he saw the disease begin to kill many gay people he knew.

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FDA Aims to Reduce Contaminated Food Via New Rules

With one in six people in America developing a foodborne illness each year , the U.S. Food and Drug Administration is moving forward with the proposal of two new rules as required by the Food Safety Modernization Act , FSMA, signed into law Jan. 4, 2011. Some might say, "At long last," since this is the first major action by the federal agency since the legislation was signed into law by President Barack Obama.
New FDA-Proposed Rules Address Manufacture, Handling and Processing of Food
The first rule deals with foreign and domestic manufacturers of food for human consumption would require these manufacturers to develop a plan to prevent their products from causing foodborne illnesses, and should a problem develop, the manufacturers would be required then to develop a plan to address the issue.
The second rule addresses farms that grow fruits and vegetables by setting national standards for water quality used in the production and handling of such crops.
Implementation of New Food Safety Rules
The FDA's proposed new rules will be published in the Federal Register as required with a 120-day open period for comments and concerns by citizens before the new rules will become final.
Don't look for immediate enactment of the rules, even when the public comment period comes to and end. The federal agency will review the comments and make any necessary adjustments to the rules, with the beginning of implementation expected to be about a year, Taylor explained to USAToday.com .
The deputy commissioner also revealed that implementation of these rules will require re-training of government inspectors, but as of yet no one knows where funding will come from for the changes.
New Food Safety Regulations Shift Focus from Reaction to Prevention
Michael R. Taylor, deputy commissioner for foods and veterinary medicine at the FDA, said in an interview that the new rules "set the basic framework for a modern, science-based approach to food safety" and shift the focus of food safety to one of prevention rather than reaction.
Taylor addressed the rationale that required two years for the federal agency to go from Jan. 1, 2011 to enactment on the law: The FDA has come to the realization that one-size-fits-all rules and regulations don't address the complexity of the issues, or the practicality of genuine solutions.
TheHill.com reported that some food safety advocates were angered by the long delay, and the Center for Food Safety filed a lawsuit in August against the FDA and the Obama administration for bypassing interval deadlines in the law without taking action.
Bottom Line
The U.S. Centers for Disease Control and Prevention estimated that nearly 130,000 Americans are hospitalized each year from foodborne illnesses and approximately 3,000 deaths annually result from these preventable infections. The safety of food in the United States is either important or it isn't; the federal government dragging its feet in the implementation of, and funding for, the Food Safety Modernization Act belies the very law it established.

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Tubular raises $2.5 million to serve burgeoning YouTube industry

SAN FRANCISCO (Reuters) - Tubular, a small San Francisco start-up that provides analytics for YouTube content creators, has raised $2.5 million in venture capital in the latest sign of how far the business ecosystem has evolved around the Google-owned video repository.
YouTube was once known as Wild West of online video, but over the past two years Google has focused on raising the quality of YouTube content through a series of direct investments and the cultivation of third-party "networks".
The result is a cluster of small studios, mostly based in Los Angeles, that acts like a digital Hollywood, pumping out slick YouTube hits.
With the ultimate goal of hosting enough high-quality content to lure big-spending advertisers to YouTube, Google doled out more than $100 million last year in grants to its networks and bedroom stars.
In May Google led a group of investors who poured $35 million into Machinima, a leading network, to stoke growth in the YouTube industry.
That market has now grown to the point that it can support its own start-ups, says Tubular's founder Rob Gabel.
COMPETITION
As more semi-professional and professional YouTube creators enter the sector, with increasing competition among them, there is a growing need for analytical services.
Tubular is one such service, allowing customers to monitor and measure when videos get the most views and comments, or the sources of referred traffic.
The software includes a dashboard that displays the real-time analytics, which are generated by tapping into a stream of data provided by YouTube.
"If YouTube is a multibillion-dollar market, then that's billions of dollars going out to content creators who can then invest that again," said Gabel, a former Machinima employee.
"On every platform, from Google to Facebook to Twitter, people have turned to third parties' helpful tools."
At a high level, the pie is large and continuing to grow rapidly. Former Citi analyst Mark Mahaney estimates that YouTube will bring Google a total of $3.6 billion in 2012.
Rich Heitzmann, a co-founder of FirstMark Capital, which led Tubular's latest funding round, said that Google is far from wringing out all of the potential revenue from YouTube.
"We think the ecosystem is at least the size of Facebook's, considering it has a billion users and if you consider the time spent on YouTube," Heitzmann said.
"The advertising opportunities are there, and yet the ecosystem hasn't evolved technologically."
SUSTAINABLE BUSINESS
Other investors in Tubular's first tranche of equity financing included High Line Venture Partners, SV Angel, Lerer Ventures and Bedrocket Media Ventures.
Still, Gabel is betting that he can create a long-term, sustainable business on YouTube's platform at a time when some Silicon Valley companies are wary of building on the backs of larger companies.
Twitter, for instance, courted controversy this year when it made a business decision to shut off its firehose of data for a number of popular third-party developers to drive more visitors to its own site.
Allen DeBevoise, the CEO of Machinima who is also a Tubular investor, said that YouTube has reason to foster its independent developers rather than squash them.
"It's a thriving and fast-moving ecosystem now," he said. "But a lot of players are needed to make it all work."
Though Gabel acknowledges that the YouTube industry's rapid expansion is no guarantee of success, he has high hopes.

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Instagram tests new limits in user privacy

SAN FRANCISCO (Reuters) - Instagram, which spurred suspicions this week that it would sell user photos after revising its terms of service, has sparked renewed debate about how much control over personal data users must give up to live and participate in a world steeped in social media.
In forcefully establishing a new set of usage terms, Instagram, the massively popular photo-sharing service owned by Facebook Inc, has claimed some rights that have been practically unheard of among its prominent social media peers, legal experts and consumer advocates say.
Users who decline to accept Instagram's new privacy policy have one month to delete their accounts, or they will be bound by the new terms. Another clause appears to waive the rights of minors on the service. And in the wake of a class-action settlement involving Facebook and privacy issues, Instagram has added terms to shield itself from similar litigation.
All told, the revised terms reflect a new, draconian grip over user rights, experts say.
"This is all uncharted territory," said Jay Edelson, a partner at the Chicago law firm Edelson McGuire. "If Instagram is to encourage as many lawsuits as possible and as much backlash as possible then they succeeded."
Instagram's new policies, which go into effect January 16, lay the groundwork for the company to begin generating advertising revenue by giving marketers the right to display profile pictures and other personal information such as who users follow in advertisements.
The new terms, which allow an advertiser to pay Instagram "to display your username, likeness, photos (along with any associated metadata)" without compensation, triggered an outburst of complaints on the Web on Tuesday from users upset that Instagram would make money from their uploaded content.
The uproar prompted a lengthy blog post from the company to "clarify" the changes, with CEO Kevin Systrom saying the company had no current plans to incorporate photos taken by users into ads.
Instagram declined comment beyond its blog post, which failed to appease critics including National Geographic, which suspended new posts to Instagram. "We are very concerned with the direction of the proposed new terms of service and if they remain as presented we may close our account," said National Geographic, an early Instagram adopter.
PUSHING BOUNDARIES
Consumer advocates said Facebook was using Instagram's aggressive new terms to push the boundaries of how social media sites can make money while its own hands were tied by recent agreements with regulators and class action plaintiffs.
Under the terms of a 2011 settlement with the Federal Trade Commission, Facebook is required to get user consent before personal information is shared beyond their privacy settings. A preliminary class action lawsuit settlement with Facebook allows users to opt-out of being included in the "sponsored stories" ads that use their personal information.
Under Instagram's new terms, users who want to opt-out must simply quit using the service.
"Instagram has given people a pretty stark choice: Take it or leave, and if you leave it you've got to leave the service," said Kurt Opsahl, a senior staff attorney with the Electronic Frontier Foundation, a Internet user right's group.
What's more, he said, if a user initially agrees to the new terms but then has a change of mind, their information could still be used for commercial purposes.
In a post on its official blog on Tuesday, Instagram did not address another controversial provision that states that if a child under the age of 18 uses the service, then it is implied that his or her parent has tacitly agreed to Instagram's terms.
"The notion is that minors can't be bound to a contract. And that also means they can't be bound to a provision that says they agree to waive the rights," said the EFF's Opsahl.
BLOCKING CLASS ACTION SUITS
While Facebook continues to be bogged in its own class action suit, Instagram took preventive steps to avoid a similar legal morass.
Its new terms of service require users with a legal complaint to enter arbitration, rather than take the company to court. It prohibits users from joining a class action lawsuit unless they mail a written "opt-out" statement to Facebook's headquarters in Menlo Park within 30 days of joining Instagram.
That provision is not included in terms of service for other leading social media companies like Twitter, Google, YouTube or even Facebook itself, and it immunizes Instagram from many forms of legal liability, said Michael Rustad, a professor at Suffolk University Law School.
Rustad, who has studied the terms of services for 157 social media services, said just 10 contained provisions prohibiting class action lawsuits.
The clause effectively cripples users who want to legally challenge the company because lawyers will not likely represent an individual plaintiff, Rustad argued.
"No lawyers will take these cases," Rustad said. "In consumer arbitration cases, everything is stacked against the consumer. It's a pretense, it's a legal fiction, that there are remedies."
Instagram, which has 100 million users, allows consumers to tweak the photos they take on their smartphones and share the images with friends. Facebook acquired Instagram in September for $715 million.
Instagram's take-it-or-leave-it policy pushes the envelope for how social networking companies treat user privacy issues, said Marc Rotenberg, the executive director of the Electronic Privacy Information Center.
"I think Facebook is probably using Instagram to see how far it can press this advertising model," said Rotenberg. "If they can keep a lot of users, then all those users have agreed to have their images as part of advertising.

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