Instagram's new terms of service: from overreaction to retraction

According to one mobile app metrics firm, Instagram appears to be suffering in the wake of its recent terms of service debacle. AppData tracks the number of daily, weekly, and monthly users of apps that can connect to Facebook, and its recent daily data shows a 25 percent decline in daily users of Instagram over the last seven days — previous daily usage counts were nearly 16 million, while the most recent data now shows daily users sitting at about 12.4 million.

AppData was quick to attribute this to Instagram's revised terms of service, which were announced on December 17th and immediately trigged a rather misinformed backlash against the company. The company quickly changed course and returned the TOS to its original state, but AppData apparently believes the outraged userbase started dropping the service, leading to the decline in its data. The analytics firm told The New York Post that it was "pretty sure the decline in Instagram users was due to the terms of service announcement."

Last night Instagram announced that it was retracting a controversial terms of service change that was widely and inaccurately interpreted to mean that the company would be selling user photos. "Because of the feedback we have heard from you, we are reverting this advertising section to the original version that has been in effect since we launched the service in October 2010," founder Kevin Systrom wrote in a blog post. "Instagram has no intention of selling your photos, and we never did."

That certainly sounds like a win for consumers, but it's actually a loss: the newly-reinstated terms of service clause is objectively worse for users than the new one, and it's worded far more vaguely — the language feels familiar and comforting, but you're giving up more rights to your photos. Instead of agreeing that Instagram may only "display" photos "in connection with" advertising, users will now continue to agree that Instagram may place advertising and promotions "on, about, or in conjunction with" their photos.

Tuesday night, John Bell had to convince his wife not to quit Instagram. At the beginning of the week, she'd been a die-hard user but, like many others, recent changes in the Terms of Service had convinced her it was time to give it up. The awkward part: he’s the global marketing manager of social@ogilvy, the new-media wing of legendary ad firm Ogilvy & Mather. In short, he's one of the guys who's bringing ads to Instagram.

"I told her, 'You're overreacting!'" Bell relayed to The Verge. "But then, we're all overreacting."

After changes to its terms of service caused outcry from multiple corners, Instagram has reversed course, announcing that it will be reverting the offending section back to the version in place when the service first launched. The flashpoint was a change to the advertising section; a change in the language gave many the impression that Instagram would be selling users' photos whenever it felt appropriate. "Because of the feedback we have heard from you, we are reverting this advertising section to the original version that has been in effect since we launched the service in October 2010," co-fouder Kevin Systrom writes in a post on the company's blog. The updated terms of service are available on Instagram's site.

Instagram isn't going to stop pursuing advertising, however. Systrom's statement makes it clear that the company is going to continue to develop new products in that arena — but that it will come to users with a fully-developed product in hand that it can clearly explain, rather than baking in protection for future approaches into its TOS.

Instagram has just responded to the public outcry over changes to its terms of service today, with co-founder Kevin Systrom writing that the company is "listening," and that "it's not our intention to sell your photos" — to fix the problem, it will update its terms of service. Systrom writes that it will "modify specific parts of the terms to make it more clear what will happen with your photos," and that it has no plans to sell them. Instagram updated its terms of service and privacy policy yesterday, provoking a swath of negative feedback from users who thought that their photos may be sold to other companies, or that their friends, relatives, or selves would be featured in corporate advertisements. But the terms don't legally permit Instagram to sell its photos to anyone; instead, the company has limited rights to display user photos in a way that doesn't create anything new.

Systrom also addresses privacy settings in its blog post, writing that "nothing has changed about the control you have over who can see your photos. If you set your photos to private, Instagram only shares your photos with the people you've approved to follow you."

You agree that a business may pay Instagram to display your photos in connection with paid or sponsored content or promotions without any compensation to you.

That sentence was added to Instagram's terms of service yesterday, sparking widespread outrage — the most panicked analysis claims Instagram just gave itself permission to sell everyone's photos at will. Even the least icky hypothetical scenarios being tossed around are completely icky: your parents leave a comment on a photo of your kid, and five minutes later, they're looking at an ad for a new life insurance policy featuring that same intimate photo of their grandchild. Is this really the future of Instagram?