Instagram’s announcement yesterday of a new set of terms and conditions has elicited a backlash from many of its 100 million users, with many vowing to ditch the service before the changes take effect on January 16, 2013.

The crux of these changes is that Instagram, a photo-sharing mobile app launched in October 2010 and bought by Facebook for nearly US$1 billion in April, has the right to take photographs from user accounts and – potentially – sell them to advertising companies, without revenue going to the account holder.

In case it was needed, this is another stark reminder of the vulnerability of our data online – but what does it really mean, and is it really a privacy issue as many are claiming?

A bit of T&C

The controversy surrounds Instagram’s proposed terms and conditions that permit display advertising next to users’ images and the potential sale of users’ content to third parties without compensation.

Most users would be comfortable with advertising when using commercial services – that’s how the web goes round. But the license to provide images to sponsors without compensation is more controversial. Instagram’s proposed terms and conditions state:

Some or all of the Service may be supported by advertising revenue. 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 username, 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.

For those under the age of 18, the terms state that by agreeing to them you represent a parent or legal guardian who has agreed to the above provision.

High profile users, including Pink and Mia Farrow, have said they will delete their accounts given the changed terms.

It is important to note that Instagram has already released a statement – earlier today – indicating that the company does not intend to sell user’s images to third parties, and that the new terms and conditions will be amended to clear up the current confusion.

Even if Instagram did not retract that possibility, it is worth identifying what users are particularly worried about and whether privacy is the main concern.

Instagram and Facebook

A good place to start is with Instagram’s owner, Facebook, which also collects images and information about users. Facebook also has terms and conditions similar to the proposed Instagram terms, that state:

You can use your privacy settings to limit how your name and profile picture may be associated with commercial, sponsored, or related content (such as a brand you like) served or enhanced by us. You give us permission to use your name and profile picture in connection with that content, subject to the limits you place.

We do not give your content or information to advertisers without your consent …

Those terms indicate that Facebook can use information about users, including profile images, in connection with commercial content subject to privacy settings. But this does not extend to a user’s photo libraries or galleries, only his or her profile picture. Why might this be?

There are differences in how images are dealt with by Facebook and Instagram. On Facebook, the terms stipulate that users must have “real name” profiles. Users are tagged in images, connecting those images to users and their associated information.

Revenue can be earned through the capacity to identify users as advertising targets based on the individuals they are connected to, what they “like,” and other metrics provided on their profiles.

Instagram does not require real names for profiles, nor are users tagged. Instead, Instagram has a profound repository of images uploaded and categorised by users through hashtags.

Instagram’s new terms and conditions have alerted users to the possibility that their baby photos, holiday snaps or any other image could be used by advertisers who would pay Instagram, but not the user or model.

In the most extreme imagination, Instagram would possess a catalogue of images that could be sold or licensed similar to stock image libraries such as Getty. Although company representatives have said they do not intend to do this, the proposed terms permit them to do so.

Publicity rights

Is this really a privacy issue? Instagram users are generally content for the broader Instagram community to have access to their images – unless they have a private profile (which the new terms and conditions would not undermine).

The unauthorised disclosure or circulation of images is certainly something dealt with by privacy law, but the terms and conditions stipulate that the user provides such authority. So that should normally mean that the distributions are permitted – and the question, still, is whether privacy is the issue here at all.

The main concern seems to be a quasi-commercial one, the interests here akin to the “publicity rights” that are recognised in the US, which provide persons with a right to commercial exploitation of their personality.

Australian law generally does not recognise publicity rights.

On the other hand, photographs may well be covered by copyright protection. Indeed, the Instagram terms and conditions seem to be framed as a copyright licensing agreement, where the user retains ownership of images but gives a very liberal licence to Instagram to commercially exploit those images in exchange for free access to the Instagram service.

Perhaps it’s time to start thinking about whether it should be up to individuals to look out for themselves when it comes to information privacy, or whether our regulators need more power.