Instagram’s terms of service: The big picture

It may be owned by Facebook, but don’t pretend Instagram is one of your friends.

The mobile photo sharing service caused an uproar in social media circles on Tuesday by updating its terms and conditions, the document that sets out the rules for using it. Although Instagram does not claim ownership over the photos people post on it, the terms and conditions give the company a sort of licence to use them in various ways. Suddenly, it seems to want more from that licence.

“Some or all of the Service may be supported by advertising revenue,” the Instagram document says. “To help us deliver interesting paid or sponsored content or promotions, you agree that a business or other entity may pay us to display your username, likeness, photos (along with any associated metadata), and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you.”

Later the same day, Instagram's founder Kevin Systrom wrote a blog post that suggested the terms and conditions had been misinterpreted.

"We’d like to experiment with innovative advertising that feels appropriate on Instagram," he said, explaining that the terms would allow for more simple things like using profile photos to show who follows certain brands or services. "To be clear: it is not our intention to sell your photos."

There's a big difference between forcing people into a mass stock photo service and using profile pictures to create a box that says, "Friends who also like this," but for many users, the confusion was an ugly wake-up call about the vulnerability they face in using social tools. Though they may be sharing the photos “in public,” there’s often a sense that, with the proper privacy settings, their personal information remains completely in their control. Even if Instagram updates the terms and conditions again as Systrom promised next month, this week's debacle shatters that illusion completely. And about time, too.

The whole situation is not dissimilar to moves by Google earlier this year to consolidate around 60 different privacy policies for various services into one. Many worried that this would allow the search engine giant to do a lot deeper data mining on consumers, which be highly valuable (and lucrative) to potential advertising clients. Instagram is sitting on a similarly valuable treasure trove of names and faces. It’s becoming a consistent pattern: social media services start out by focusing on the fun elements, strike a posture of goodwill and openness, then turn the tables once they achieve critical mass.

“I sort of come down on the side of, ‘Buyer beware,’” says Mark Goren, director of research at Nexalogy Environics in Montreal, which creates software to track the sentiments people are expressing online. “A lot of people are using these channels for fee. They get the benefit of connecting with people and communicating but it doesn’t cost a dime . . . It’s foolish not to think that at a certain point they’re not going to figure out a way to make money.”

Goren says that within the last 24 hours, there have been more than a million posts on Twitter mentioning Instragram, and some 10,000 have used some variation on the term, “bye-bye.”

I doubt we’ll see a mass exodus from Instagram, however. Unless the company started maliciously using consumers’ images for profit in ways that are obviously inappropriate -- and Systrom is promising otherwise -- the majority will grudgingly move on. It may be we’ll one day even accept the notion of part of personalized online ad campaigns, which is what Instagram’s business model is starting to look like. After all, there was a time when sharing half the things on we do today on social media services would have seemed completely ridiculous and dangerous.

The lesson here is to approach the next big social media service with our eyes wide open, cognizant that using online tools for free doesn’t mean you won't pay to play somewhere down the road. When Facebook bought Instagram, everyone wondered how it could be valued at US$1 billion. Now you know.

Instagram policy outrageInstagram backtracks on the wording in its new terms of service after users interpreted the new policy as giving the photo-sharing site the power to sell their uploaded photos or related information