Virgin is using Flickr photographs without first contacting the people that took the photo. They are getting free images to use as they please.
From all appearences Virgin did everything legally, if a bit
ham-handedly. The pictures they used were up on Flickr under a Creative Commons License which allows broad usage guidelines. But they could have done better and leveraged the personal
involvement of some end users...how about a free phone or even some
shwag would have done wonders. Anything would have been better than
just pinching some free pics.
At least one other company has done something like this in the past, Nikon: nikonstunninggallery. But they did it with user involvement and not to simply use Flickr as a free inventory of photos a la Virgin. Smart of Nikon, less smart of Virgin.
Millenials
This flies right into the face of the millenial generation. The kids these days are unconcerned with putting their entire life out and up on the web. Here is an example of a company taking advantage of this free public content.
What other content types are available to use like this I wonder?
Will this change any attitudes of the millenials? I think not. They (and most everyone else too I might add) don't care and will just shrug this off as unimportant. In fact if Virgin had been a bit smarter, they could have run a contest around this and made it a net benefit.

BTW Virgin is putting a link to each of the photographers Flickr page for the photo they used. For instance this photo belongs to this guy: http://www.flickr.com/photos/eudg/. I wonder if he knows he's in the advert campaign.
There is a lively debate going on over here: Dump Your Pen Friend
Hat tip: MIT Advertising Lab - Can You Use Flickr Pics in Ads?