Instagram Terms of Service: Stupid or Strategic?

For people who subscribe to the belief that there is no such thing as bad publicity, they should be thrilled at the exposure photo sharing social network Instagram has received this week. On Monday, Instagram posted changes to its Terms of Service scheduled to take effect January 16. One item that raised the ire of many Instagram users was language that said "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 user name, 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."

The rights extended in this language meant Instagram had latitude to include users' photos in advertisements. Another aspect of the revised TOS agreement is an extensive sharing of user data between Instagram and Facebook, which acquired Instagram for $1 billion earlier this year.

User feedback was swift and furious. Instagram boasts more than 100 million users, ranging from teens to professional photographers to celebrities. Upset users voiced their displeasure by deleting their accounts (or saying they will by January 16). There has even be talk of an organized effort to encourage users to drop their Instagram service. The company was listening to the intense backlash, and on Tuesday Instagram co-founder Kevin Systrom said that the language concerning image use in ads would be dropped from the new TOS because "we do not have plans for anything like this."

Assuming there really were no plans for integrating users' photos into advertising, then why would Instagram go down the path of writing it into the TOS agreement? Management would have to be either very arrogant or extremely out of touch with social media users' reactions to changes in TOS agreements that impact privacy, as we have seen most notably from Instagram's parent, Facebook. On more than one occasion, Facebook has had to backpedal on changes to its service that were perceived as threats to users' privacy.

If stupidity is not to blame for the changes in Instagram's TOS and resulting backlash, then perhaps it can be chalked up to strategy. Facebook has been adept at pushing the envelope on information sharing. When it has crossed a perceived line, Facebook has backed off enough to satisfy the majority of people with concerns. And, such responses can be positioned as showing empathy to users' concerns and being customer oriented. It seems that Instagram was testing the waters. A quick, ferocious backlash had to be expected. In that case, a swift response of "we're sorry" and a pledge to not make the most controversial of the proposed changes would be in order... which is exactly what Instagram did.

It could be argued that the strategy behind the proposed change to TOS was to determine the limits to which user data can be shared and used for commercial gain without alienating the very people that have made Instagram a social media success story. If users pushed back against some, but not all, of the changes, then the end result would still be broader rights for Instagram. The challenge remains for Instagram how to monetize its wildly popular service now that the trial balloon of users' photos in ads has been shot down.

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