In all the furor, did anyone stop to take a look at how the relevant statement in Instagram's terms of service stacks up with the policies of other social networks?
... You hereby grant YouTube a worldwide, non-exclusive, royalty-free, sublicenseable and transferable license to use, reproduce, distribute, prepare derivative works of, display, and perform the Content in connection with the Service and YouTube's (and its successors' and affiliates') business, including without limitation for promoting and redistributing part or all of the Service (and derivative works thereof) in any media formats and through any media channels.
... You grant us a worldwide, non-exclusive, royalty-free license (with the right to sublicense) to use, copy, reproduce, process, adapt, modify, publish, transmit, display and distribute such Content in any and all media or distribution methods (now known or later developed).
The relevant policies of Facebook, Google, and Yahoo, the parent companies of Instagram, YouTube, and Flickr, respectively, are similar. Yes, Instagram's new terms of service also contain a confusingly worded follow-up sentence that could be misread as allowing it to sell your photos to advertisers without compensation to you. But so could all the sentences above—if not for the fact that every single one, including Instagram's, is preceded by a sentence clearly stating that you, and not the site, own all of the content you post to it.
That makes The Verge's reading of Instagram's new policy much more plausible: namely, that you're allowing advertisers to pay Instagram to display your content as part of sponsored posts—within Instagram. Contrary to CNET's article, you're not allowing Instagram to sell your photos. Only you can do that. As The Verge's Nilay Patel points out: "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."
UPDATE, Dec. 18, 5:34 p.m.: Instagram founder Kevin Systrom has just released a blog post entitled "Thank you, and we're listening." In it, Systrom apologizes for the confusion, says Instagram had no intention to sell users' photos or allow them to be used in advertisements, and adds that Instagram will rework the language of its policy to make that more clear. From the post:
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. ...
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.
Systrom is right to apologize for the murky language. It would be fun to see tech blogs apologize in turn for misleading their readers by running with a sensational story before taking the time to make sure it's true, but that's not going to happen. On the bright side, by interpreting the confusing policy in the most alarming possible light, the tech press has forced Instagram to toe the line more carefully than it otherwise might have. That's a win for users—although perhaps not the ones who took time out of their day to download all their photos, delete all their accounts, and switch to another service. Their Instagram account names, photos, and followers are never coming back.