instagramInstagram, a wildly popular photo sharing App for iPhone and Android smartphones made some changes to their Privacy Policy and Terms of Service earlier this week that inadvertently kicked off a reputation implosion.

In a nutshell, under the proposed changes to Instagram’s Privacy Policy and Terms of Service, Instagram would be able to sell/use users’ pictures in advertisements and any images uploaded to Instagram would no longer be owned by users. Instagram users were completely caught off guard by these proposed changes.

Within hours streams of conversations were flowing heavily on social media networks which encouraged others to delete their Instagram accounts in protest, out of outrage or out of principle. Step-by-step instructions detailing how to delete your Instagram account and switch to Instagram alternatives were circulating the Web. Many expressed their outrage and feelings of betrayal on social networks, blog posts or decided to demonstrate their outrage by downloading their photos and deleting their Instagram account. An Instagram exodus was underway and the outrage was amplified by celebrities who were stunned by Instagram’s decision.

Then, Instagram’s co-founder, Kevin Systrom, responded in a blog post indicating that Instagram got the message loud and clear.  Kevin Systrom’s blog post follows:

Yesterday we introduced a new version of our Privacy Policy and Terms of Service that will take effect in thirty days. These two documents help communicate as clearly as possible our relationship with the users of Instagram so you understand how your data will be used, and the rules that govern the thriving and active Instagram community. Since making these changes, we’ve heard loud and clear that many users are confused and upset about what the changes mean.

I’m writing this today to let you know we’re listening and to commit to you that we will be doing more to answer your questions, fix any mistakes, and eliminate the confusion. As we review your feedback and stories in the press, we’re going to modify specific parts of the terms to make it more clear what will happen with your photos.

Legal documents are easy to misinterpret. So I’d like to address specific concerns we’ve heard from everyone:

Advertising on Instagram From the start, Instagram was created to become a business. Advertising is one of many ways that Instagram can become a self-sustaining business, but not the only one. Our intention in updating the terms was to communicate that we’d like to experiment with innovative advertising that feels appropriate on Instagram. Instead it was interpreted by many that we were going to sell your photos to others without any compensation. This is not true and it is our mistake that this language is confusing. To be clear: it is not our intention to sell your photos. We are working on updated language in the terms to make sure this is clear.

To provide context, we envision a future where both users and brands alike may promote their photos & accounts to increase engagement and to build a more meaningful following. Let’s say a business wanted to promote their account to gain more followers and Instagram was able to feature them in some way. In order to help make a more relevant and useful promotion, it would be helpful to see which of the people you follow also follow this business. In this way, some of the data you produce — like the actions you take (eg, following the account) and your profile photo — might show up if you are following this business.

The language we proposed also raised question about whether your photos can be part of an advertisement. We do not have plans for anything like this and because of that we’re going to remove the language that raised the question. Our main goal is to avoid things like advertising banners you see in other apps that would hurt the Instagram user experience. Instead, we want to create meaningful ways to help you discover new and interesting accounts and content while building a self-sustaining business at the same time.

Ownership Rights Instagram users own their content and Instagram does not claim any ownership rights over your photos. Nothing about this has changed. We respect that there are creative artists and hobbyists alike that pour their heart into creating beautiful photos, and we respect that your photos are your photos. Period.

I always want you to feel comfortable sharing your photos on Instagram and we will always work hard to foster and respect our community and go out of our way to support its rights.

Privacy Settings Nothing has changed about the control you have over who can see your photos. If you set your photos to private, Instagram only shares your photos with the people you’ve approved to follow you. We hope that this simple control makes it easy for everyone to decide what level of privacy makes sense.

I am grateful to everyone for their feedback and that we have a community that cares so much. We need to be clear about changes we make — this is our responsibility to you. One of the main reasons these documents don’t take effect immediately, but instead 30 days from now, is that we wanted to make sure you had an opportunity to raise any concerns. You’ve done that and are doing that, and that will help us provide the clarity you deserve. Thank you for your help in making sure that Instagram continues to thrive and be a community that we’re all proud of. Please stay tuned for updates coming soon.

Sincerely,

Kevin Systrom co-founder, Instagram

 In a swift about face, Kevin Systrom took to Instagram’s blog once more to speak directly to Instagram users explaining Instagram updated their Terms of Service due to the feedback.

Kevin Systrom’s full comments follows:

Earlier this week, we introduced a set of updates to our privacy policy and terms of service to help our users better understand our service. In the days since, 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.

The concerns we heard about from you the most focused on advertising, and what our changes might mean for you and your photos. There was confusion and real concern about what our possible advertising products could look like and how they would work.

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. You can see the updated terms here.

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.

You also had deep concerns about whether under our new terms, Instagram had any plans to sell your content. I want to be really clear: Instagram has no intention of selling your photos, and we never did. We don’t own your photos – you do.

Finally, there was also confusion about how widely shared and distributed your photos are through our service. The distribution of your content and photos is governed by our privacy policy, and always has been. We have made a small change to our terms to make that as clear as possible.

You can view the current terms and privacy policy, as well as review the updated terms and privacy policy that will take effect on January 19, 2013.

I’m proud that Instagram has a community that feels so strongly about a product we all love. I’m even more proud that you feel empowered to be vocal and approach us with constructive feedback to help us build a better product. Thank you for your feedback, and I look forward to all that Instagram has to bring in the New Year.

Thank you,

Kevin Systrom co-founder, Instagram

Lessons:

This seemingly snap decision has left some Instagram users wondering if this was some sort of bait and switch or if Instagram was hoping to slide these changes past users while they were preoccupied with holiday preparations. Instagram competitors are the big winners in Instagram’s stumble – they are always happy to receive the influx of users who have jumped ship from a competitor.

Instagram is learning a painful lesson about decisions, relationships and communication. Any management decision that comes out of left field will leave users feeling used or trampled upon, which isn’t good for a growing business or brand. It’s a bit naive and just too risky. Unless your goal is to create a digital outcry that will shake a reputation to its core, users must be valued and respected, even if the service or solution provided is free.

There must always be a high level of respect for those who use your services.

It’s a two way street. Respect your users, clearly communicate your intentions and respond to feedback. These are actions that will help preserve your reputation.

How can you keep users in the loop and avoid wide spread criticism?

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