Instagram's changes to its terms of service and privacy policy come into effect on Saturday, a move that has not received support from users.
A draft proposal of the policy changes was released in December and left Instagram users unimpressed, as it suggested parent company Facebook could claim the right to license all public Instagram photos to companies for whatever purpose, including advertising.
The announcement saw Instagram's daily active users drop 42%, from 16.3 million in mid-December to 7.6 million by 14 January, according to figures from monitoring company AppStats.
The updated advertising policy, which many understood would allow Instagram to sell users' photos and information to advertisers, quickly became a bone of contention. While the old terms stated the company could place advertisements on the site, alongside photographs, the new terms would allow users' photos to be used asadvertisements, with no compensation given to the person who originally took the picture.
"I want to be really clear: Instagram has no intention of selling your photos, and we never did. We don't own your photos - you do," said Instagram CEO Kevin Systrom, in a blog post in December.
In the same post, Systrom announced Instagram would revert back to its original advertising strategy, which has been in effect since the social network started in October 2010.
What does this mean?
On Tuesday, Instagram sent an e-mail to users reminding them of the upcoming policy changes. In the mail, the team from Instagram noted the updated policies "now take into account the feedback we received from the Instagram community".
Under the new policies, Instagram still reserves the right to create personalised ads using photos uploaded by users. Users can combat this by making their images private, which makes them off limits for use by Instagram, according to its privacy policy.
The new terms will see user data being pooled from both Instagram and Facebook, which Facebook CEO Mark Zuckerburg alluded to yesterday when introducing Facebook's new Graph Search.
Zuckerburg mentioned the social network's new venture would eventually make use of data from Instagram. "Instagram data is on the list of things we will one day get to. It's so clear how much stuff out there you'd want to have in a product like this," said Zuckerburg at the Graph Search press event.
For now, the new policies mean little change for users, aside from the introduction of advertising to the site. But analysts assert the Instagram incident highlights how concerns about privacy have the potential to threaten the advertising-based revenue models of many social media companies.
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