Facebook Backs Down Quickly Over Instagram Policy Changes

Investor's Business Daily

Facebook (FB) faced a backlash among users of its Instagram application Tuesday because of policy changes the popular photo-sharing site now says it will reverse.

The uproar was partly due to a widely interpreted view that Instagram could sell user photos for advertising and promotions "without any compensation to you," according to the initial policy statement.

Users responded on Twitter and blog posts with threats of abandoning the service.

The initial policy change was announced late Monday. About 24 hours later Instagram responded with a blog post saying, "Since making these changes, we've heard loud and clear that many users are confused and upset about what the changes mean." Instagram said its intent was to "experiment with innovative advertising" and promote user engagement but would remove language that implied photos would be used in ads. The intent was not to sell photos posted by users without compensation, Instagram said.

The policy change as initially announced sparked intense criticism from privacy advocates like the Electronic Frontier Foundation. Others said the reaction was overblown.

"There's no way Instagram can sell your photos to anyone," wrote TheVerge.com. The Instagram plan, it said, is similar to what Facebook already does with "sponsored posts," where ads are placed in the context of a user's Facebook content. Facebook's sponsored post program is seen as a key element to boosting ad revenue.

It was the first big policy shift since Facebook in April announced it would acquire Instagram for $1 billion. When the deal closed in September, Facebook said it would keep Instagram independently managed.

Instagram launched in October 2010 and has about 100 million users. The photo-sharing app is popular on Facebook, the Apple (AAPL) iPhone and Google (GOOG) Android phones.

The new policy claimed perpetual rights to license all public Instagram photos to businesses and organization, including for advertising purposes. The policy might violate state privacy laws and Federal Trade Commission guidelines, according to reports.

The updated policy change by Instagram and signed by co-founder Kevin Systrom said, "Instagram users own their content and Instagram does not claim any ownership rights over your photos. Nothing about this has changed.

Facebook rose 3.6% Tuesday.

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