Under a continuing barrage of negative feedback, account cancellations, and defections by its users to other photo sharing services, Instagram has withdrawn the most controversial changes to its terms of service agreement. The about-face means that Instagram will not assume the legal right to license users’ photos to third parties without permission.

“Because of the feedback we have heard from you, we are reverting this advertising section to the original version that has been in effect since we launched the service in October 2010,” said Instagram co-founder Kevin Systrom in a statement posted on a company blog late yesterday.

Among the most objectionable terms of service changes proposed by Instagram was a clause allowing the company to license photos to third parties, and also use the photos in advertising, without the knowledge or permission of the Instagram user who posted those images in the first place.

A number of professional photographers, as well as some high profile users of Instagram including National Geographic, announced that they intended to stop using the service because of the proposed changes to the terms of service. Instagram said earlier this week by announcing it had no intention of selling their photos, but that apparently wasn’t enough to calm upset subscribers to the service.

In the meantime, subscriptions to competing services have spiked, according to a report in the New York Times. Flickr’s mobile app has jumped in popularity on the Apple iTunes app chart, and subscriptions to the photo sharing service Pheed have quadrupled in the past week, the Times reported.

Systrom explained in last night’s announcement that after introducing changes to Instagram’s terms of service and privacy policy earlier this week, “it became clear that we failed to fulfill what I consider one of our most important responsibilities – to communicate our intentions clearly. I am sorry for that, and I am focused on making it right.”

So once again Instagram has modified its privacy policy and terms of service. When the latest versions take effect–on January 16, 2013 and January 19, respectively–Instagram will have broad rights to use photos, but only with permission from the contributors.

“You hereby grant to Instagram a non-exclusive, fully paid and royalty-free, transferable, sub-licensable, worldwide license to use the Content that you post on or through the Service, subject to the Service’s Privacy Policy,” says the latest TOS agreement, which goes into effect January 19. It adds, “You can choose who can view your Content and activities, including your photos, as described in the Privacy Policy.”

The privacy policy that takes effect January 16 says that Instagram “will not rent or sell your information to third parties outside Instagram (or the group of companies of which Instagram is a part) without your consent, except as noted in this Policy.” The exceptions are service providers who “will be given access to your information as is reasonably necessary to provide the Service under reasonable confidentiality terms.”

Instagrama also says in the new privacy policy, “We may also share certain information such as cookie data with third-party advertising partners” to deliver targeted advertising.

Users can control who sees the content they post by adjusting privacy settings on their account.

Instagram’s user policies are still subject to change, however, and Systrom hints that there will be more changes to come. Instagram company–which is owned by Facebook, a publicly traded company–is under pressure to earn money.

“Going forward, rather than obtain permission from you to introduce possible advertising products we have not yet developed, we are going to take the time to complete our plans, and then come back to our users and explain how we would like for our advertising business to work,” Systrom told users.

Related:
Photographers Balk at Instagram’s New Terms of Use
Now That We Know Instagram Isn’t a Charity, What Would You Be Willing to Pay?


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