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12.18.12

What Instagram’s New Terms of Service Mean

After major user backlash from its new terms of service, Instagram’s cofounder had to change course. Matthew Zeitlin looks into what really said.

Instagram has the same problem that its parent company Facebook, and every other social media company has: a service that people love to use (100 million in Instagram’s case) but don’t want to pay for. And now that Instagram is finally attempting to monetize those eyeballs, it is seeing serious blowback from its users. When Instagram posted its new terms of service and privacy policy,which go into effect on January 16, 2013, the user backlash and criticism was so intense that Instagram co-founder Kevin Systrom had to clarify exactly what the new language meant in a blog post Tuesday evening.

What raised the most hackles Tuesday were parts of the new terms of service that made it seem like Instagram could license photos user post and use them in advertisements. The terms of service read that “you hereby grant to Instagram a non-exclusive, fully paid and royalty-free, transferable, sub-licensable, worldwide license to use the Content that you post on or through the Service.” Instagram also said that “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.”

This led some to think that Instagram would turn itself into a user-generated Getty Images, licensing sepia-tinted photos of your Pies n’ Thighs meal for the restaurant’s website. Cue the outraged Facebook status updates promising to quit the service and one Wired writer doing so.

Systrom acknowledged that these provisions were “interpreted by many that we were going to sell your photos to others without any compensation.” He wrote that “This is not true…To be clear: it is not our intention to sell your photos.” Systrom also said that “We do not have plans” for using users’ photos in ads and that “we’re going to remove the language that raised the question.”

But just because Instagram has backed off the most negative interpretation of what its new terms of service might entail doesn’t mean that it won’t aggressively use user information in order to precisely target ads. In fact, if Instagram has any hope of sustaining itself, it will have no choice. This is what all companies that provide a service where users generate content for free have to do eventually. This is the Iron Law of Social Media: if the service is free, it will use more and more of your personal information for ever more precisely targeted ads.

Systrom wrote that “Instagram was created to become a business. Advertising is one of many ways that Instagram can become a self-sustaining business.” Facebook and Twitter could have said the same thing.

In fact, Twitter’s terms of service contain near identical language to what got everyone up in arms against Instagram. Twitter says that “By submitting, posting or displaying Content on or through the Services, you grant us a worldwide, non-exclusive, royalty-free license (with the right to sublicense) to use, copy, reproduce, process, adapt, modify, publish, transmit, display and distribute such Content in any and all media or distribution methods (now known or later developed).” Twitter itself describes this as meaning “This license is you authorizing us to make your Tweets available to the rest of the world and to let others do the same.”

Facebook already will “sell” users’ activity—like when a guy shares an Amazon page for a 55 gallon barrel of lube—and turn those into ads delivered to his Facebook friends (no, really, this happened). At the very worst, Instagram was probably thinking about something along the line of using user photos in ads targeted at the users’ friends, not licensing pictures you take of your kids while on vacation in Hawaii for that resort’s brochures. And who knows, Instagram could still do something like this in the future: Systrom’s clarification said “it is not our intention to sell your photos” and “We do not have plans” for using photos in ads.

The Iron Law of Social Media: if the service is free, it will use more and more of your personal information for ever more precisely targeted ads.

What Instagram has made clear in both the new terms of service and Systrom’s clarification is that it will use user data to target ads, just like how Twitter knows which “Promoted Tweets” to put in your timeline or how Facebook puts particular sponsored stories in your newsfeed depending on your activity.

Systrom wrote that “we envision a future where both users and brands alike may promote their photos & accounts to increase engagement and to build a more meaningful following.” Businesses would do this by allowing companies to access “some of the data you produce” (like which accounts you follow and your profile picture) and use that data to produce targeted ads. Instagram is not backing down from letting companies use user data to create and target ads, but clarifying that the photos themselves won’t show up in any sponsored content (for now).

But even Systrom’s scaled back interpretation to the terms of service may be too much for some Instagram users. And ultimately, those users are still in control. The new terms of service won’t go into effect until the middle of January, leaving users a month to download their pictures, delete their accounts, and find some other way to let all their friends know what the colorful, expensive cocktail they just ordered looks like. Or they can just tweet about it.