So what can Instagram do? Well, an advertiser can pay Instagram to display your photos in a way that doesn't create anything new — so Budweiser can put up a box in the timeline that says "our favorite Instagram photos of this bar!" and put user photos in there, but it can't take those photos and modify them, or combine them with other content to create a new thing. Putting a logo on your photo would definitely break the rules. But putting a logo somewhere near your photos? That would probably be okay.
If all of this seems vaguely familiar, it's because it's basically what Facebook has been doing with Sponsored Posts for months now — advertisers can pay to "sponsor" your posts in various categories to make sure they prominently appear in your friends' News Feeds. So if you "like" The Hobbit, the filmmakers can pay Facebook to promote that post across Facebook. The main difference is that Facebook is a little more clear and careful about what can and can't be promoted — you do lots of different kinds of things on Facebook, so it fundamentally has more things to sell. Pretty much all you do on Instagram is share photos, so there's just not much else the company can do to make money except use those photos and your data to sell ads.
And anything to do with your personal photos can be icky. Turning a "like" of a new film or status update about a morning coffee into advertising for Iron Man and Starbucks is an explicit statement about a product or brand — Facebook's simply taking our actions and repackaging them as social ad units. Instagram photos don't really have that connection: the company will be using our personal emotional moments in a limited commercial manner, even if they have no connection to the product being sold. And make no mistake: Instagram screwed up royally by publishing these new terms of service and not explaining them in any way. They could be written better and more clearly, and Instagram's intentions could be made much more plain. Instagram has our photos — the company has a responsibility to tell us exactly how it plans to make money with them, even if the plans are fairly benign.
All startups learn harsh lessons like this sometimes, but Instagram is a startup no longer: the company just made close to a billion dollars selling itself to Facebook. That's great, but the downside is that Instagram is now part of Facebook, the company we all love to hate because of its relentless quest to monetize our private lives. It's no wonder Instagram's new terms have triggered a passionate, emotional reaction in people who don't understand them — the same thing happens to Facebook users who are constantly falling for privacy hoaxes.
In fact, the real lesson here isn't about the legal implications of Instagram's terms of service — it's about how little we trust Facebook to do the right thing.
