Ah, whatever happened to good, old fashioned, fact checking. It was just a few weeks ago that many people were writing about how the press had been confused by data claiming a massive drop in Instagram users following its terms of service kerfuffle. Of course, it later came out that the data from Appdata, was suspect, as it only looked at Instagram usage on Facebook, despite the fact that most Instagram usage is done directly through its app on mobile phones. So here we are a few weeks later... and a bunch of news sources, including Wired, are reporting that Instagram has lost half of its daily users. This is based on data from a different organization, AppStats, but appear to suffer from the exact same flaw: it only looks at app usage on Facebook, which is a minority of Instagram usage. There may or may not be trouble with Instagram usage, but shouldn't the press by now be at least a little skeptical of claims based on dodgy data?

Reason has a great (if disappointing) post noting the very different reactions from both the press and the public to silly and exaggerated stories about privacy issues around Facebook as compared to the Senate reapproving the FISA Amendments Act, which has almost certainly allowed massive surveillance of and collection of data and communications from millions of Americans. You'd think the latter would deserve more attention, but nope.

There's currently nothing on the New York Times web site about the votes (either yesterday's or today's). The Associated Press wrote a story about the House's vote in September but nothing yet from yesterday or today. The Washington Post did post a story this morning. A Google news search will land hits with mostly tech or web-based media outlets.

Compare the lack of response to the way people react to privacy breaches connected to Facebook or Twitter. Media outlet after media outlet carried reports about a private picture of Randi Zuckerberg, Facebook founder Mark Zuckerberg's sister, accidentally being made public somehow through social media channels. And how many of your Facebook friends posted that silly, pointless "privacy notice" on their walls?

The post, by Scott Shackford, notes that you can't just blame the media for failing to cover the FISA Amendments Act votes -- they're just responding to what the public wants. And because Facebook seems more "real" to people than the NSA recording all their info, it seems to hit closer to home, even if one is a real abuse of privacy, and the other isn't.

The degradation of the Fourth and Fifth Amendments is an academic or theoretical matter for so many people and often lacks a strong human narrative to draw public outrage. Indeed, the very secrecy behind the application of federal domestic wiretapping has made it impossible to introduce a human narrative. We do not even know how many Americans have been spied on due to these rules (which was what Wyden's amendment was trying to fix). Like our foreign drone strikes and indefinite detention laws, the public's distance from the actual rights violations (and government-fueled fears of acts of terrorism) is a useful barrier for the state to get away with expanding its authority beyond the Constitution's limitations without significant voter pushback.

Whereas, just about everybody's on Facebook. Facebook's privacy systems affect them directly every day, and they see it. So Americans are furious that Instagram might sell their photos, while shrugging at what the federal government might do with the exact same data.

As he points out, this is why it's been so important for the government to keep the details of its spying program a secret. If people realized that the government really was sweeping up all sorts of data, they might realize that this directly impacts them too. But, that's all secret.

While there was a lot of rhetoric concerning the Instagram terms of service mess recently, most observers of these kinds of things noted that for all the claims from people that they were "quitting" the service, few people ever actually follow through on such threats. So, it surprised some this morning when the NY Post reported that Instagram users actually did flee in large droves, citing data from a company called AppData. They argued that there was a potential 25% decline in users, which is huge. The news apparently contributed to Facebook's stock dropping by nearly 3%... despite the claim being almost entirely bogus.

Even a quick look at the data that AppData presented should have raised some eyebrows: As lots of folks pointed out, starting with Zachary Seward at Quartz (linked above), the drop shown does not occur until December 24th... a good week after the whole controversy went down. Furthermore, AppData does not measure all Instagram usage at all, but the small subset of people who have connected their Instagram accounts to their Facebook accounts. But most people just use Instagram as a mobile app, and AppData doesn't measure that.

Meanwhile, Robin Wauters over at TheNextWeb does a brilliant job of showing plenty of other services that AppsData's "data" also shows "plunged" during the same time period, including Yahoo! Social bar, which shot up... and then back down: Or Pinterest, which dropped a bunch during that same time period: Wauters lists a bunch of other examples as well, all suggesting that maybe the original claim by AppData, repeated by the NY Post (and then others) had little basis in reality.

We've discussed plenty of times how class action lawsuits too often are about nothing more than some lawyers shaking down a company, hoping for a "settlement" in which the lawyers make out with millions while the "class" they represents gets very little, if anything. Yes, the class action system serves a purpose, but it seems like it's way too easily abused. Any time anyone gets upset about anything you can expect a class action lawsuit to be filed within days. Indeed, you may recall last week there was a but of a hubbub around Instagram's planned new terms of service, which really didn't say anything that new or surprising, but the online world ran with it in full outrage mode. In response, Instagram agreed to change the new terms and eventually agreed to keep much of the existing terms of service in place.

However, it appears that wasn't enough to satisfy some class action lawyers, who quickly whipped together an angry lawsuit about how awful (just awful!) Instagram's terms of service are. You can read the full complaint here and try not to laugh as the lawyers try to come up with any theory under the sun as to why the terms are somehow breaking the law. The lawyers are arguing that a small change in the standard boilerplate language used by nearly every single service online is some sort of breach of an "implied contract."

They also argue that merely putting into the terms the idea that you agree to allow them to use a photo in association with an advertisement constitutes a violation of California's publicity rights law. That's somewhat insane. The way you get around violating a publicity rights claim is to get people to license their works, and now these lawyers are arguing that in trying to get Instagram users to licenses their works, that alone violates the publicity rights law? Really? That's like saying that it's illegal for you to enter my house without signing a contract, but the second you ask for the contract, that's considered trespassing.

In the end, it's difficult to see what actual damage they'll show has occurred here. And there's a simple existing solution: if you don't like the terms, don't use the service. This isn't complicated.

A few months back, we wrote a post about how there was this idea gaining steam that somehow a fee-based service (such as a fee-based Twitter clone) would likely result in better service for users than a free one, in which revenue was paid by other third parties (advertisers and others). While I understand why the idea is compelling, it's hogwash. There are plenty of examples of companies who you pay who still treat you like crap (think: pay TV providers, mobile phone providers, airlines, etc.). The simplistic argument is that when users pay, the company's interests and the consumers' interests are "aligned." But that's not true. The company's interests remain to get more money out of you, and your interest (generally speaking) is to not have to pay that much more money (there's more to it than that, but...). Furthermore, the idea that a service that shoots for volume via free services, and then supports it with third party revenue still has tons of incentives to treat users right: because if they don't, those users go elsewhere, and the third parties no longer want to pay. Yes, there are some exceptions on both sides, but the idea that one automatically leads to better service than the other just doesn't seem supportable.

And yet... we're still seeing people arguing this. The latest is from Alexis Madrigal at The Atlantic -- someone I tend to agree with more often than not. But, this time he falls into that same simplistic argument without thinking through what he's saying. The post complains about Instagram's overhyped plan to change its terms of service, meaning that your photos might be associated with advertisements (which they later backtracked), and then quotes someone's silly, misleading and inaccurate "chart" about why only companies that make money directly from users should survive, and then assumes that all of that is true:

Truly, the only way to get around the privacy problems inherent in advertising-supported social networks is to pay for services that we value. It's amazing what power we gain in becoming paying customers instead of the product being sold.

Instagram has, what, 100 million users? If they got $5 a month from 20 million of those users, they'd be looking at $300 million in quarterly revenue. That's a nice chunk of change when you have a baker's dozen employees. You think those guys could split more than a billion dollars a year and call it good.

Of course, this is silly, top down math that never works. Here's what would actually happen in the scenario described above. If Instagram started charging $5/month, within two months, the vast majority of those 100 million users would have moved on to another competing service that does essentially the same thing for free. While I'm sure that some percentage (way, way, way, way, way below the 20% that he posits) would pay, the value for them would actually decrease since so many fewer people would be using Instagram. And, before too long, they would stop paying, because all their friends were using some other free service that does the same basic thing. And getting much more value out of it.

Yes, there are some services worth paying for, but it's ridiculous for people (especially those as knowledgeable and thoughtful as Madrigal) to fall for this silly claim that somehow "paid" online services automatically function better and treat users better than unpaid services.

So, as the deluge of hate towards Instagram got louder and louder concerning its terms of service change, the company has now come out and said that it will change the terms and, of course, that it never meant them to be read the way people were interpreting them, and that it plans to adjust the terms so that people aren't so damn angry at them. On the question of "advertising on Instagram" they note:

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 likes 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.

I'm sure this won't mollify some, but it is more or less what we had assumed they were trying to do in the first place. The blog post similarly notes that they're not claiming copyright on your images, nor are they mucking with your privacy settings.

In the end, we stand by our initial analysis: almost all of the complaints against Instagram's new terms of service were quite similar to complaints made against other terms of service in the past few years when someone got around to reading the details, which are hard to understand because of the annoying legalese that the lawyers want you to put in. Instagram -- and especially its new owners at Facebook -- should have realized ahead of time what was about to happen. They could have cut off an awful lot of this mess if they had posted a similar blog post before the new terms were released, or with the new terms explaining what they were really trying to do and why. When you let people imagine the worst, they will do so.

It never fails. No one actually reads the various terms of service for the different online services you use, but when someone finally does -- out of boredom or (more likely) because the terms are changing (yet again!) -- it's not uncommon to see sudden mass outrage. It seems to flare up every few months. Last time around it was Pinterest and this time it's Instagram, based on the claim that the company (now owned by Facebook) will have new terms that allow it to sell your photos to the highest bidder, for which you will get nothing. There is some outrage over that (selling my work!), but the thing that seems to be upsetting people the most is the fact that the company is reserving the right to have your images be used in advertisements. Here's the part in the new terms:

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.

This has created quite a bit of general outrage, though I'd argue that most (though, not all) of it is misplaced. There are some extreme arguments on both sides -- from Sam Biddle at Gizmodo telling everyone to "shut up" because they're acting like a "little whiny baby" to David Meyer at ZDNet insisting this is a move too far, and is totally unacceptable. Others are pulling out the "it's a business, what did you expect" line.

The most reasonable take I've seen so far comes from Kash Hill at Forbes, who goes through the new terms methodically, explaining what they mean. The whole "use in advertising" thing sounds basically like they're going to integrate Instagram images into Facebook's existing efforts for things like "Sponsored Stories." If that doesn't creep you out, then perhaps you shouldn't be too worried about this new thing:

If this sounds familiar, it's because it's a page from the Facebook book. It sounds like Instagram is planning something along the lines of "Sponsored Stories." So if you go into a business and gram your experience, the business can use the gram in ads, probably targeted at your friends to encourage them to do the same. The fact that Instagram grants itself the right to use metadata is significant — that means it knows the exact location where a photo was taken, making it easy for businesses to know a photo was taken inside one of their fine establishments. A big question here is whether these ad campaigns will be limited to Instagram's (and Facebook's) platforms or if they will migrate outside of the Instabook ecosystem.

Le's be honest: Many of the photos on Instagram are perfect for this. A sample gram from my weekend: "Best bloody mary in D.C. At the Pig;" that's a Pig ad waiting to happen. Actually it's a Pig ad that already happened, but no one got paid for it. Most of us are already essentially packaging and advertising our experiences to our friends (as Joe Brown at Gizmodo makes clear); Instagram is wisely trying to make money off of it.

When pitched that way, it doesn't sound nearly as bad. After all, if you were talking about how awesome the burgers at your favorite burger joint are, is it so crazy to think that the burger place might want to repeat your enthusiasm as part of their push to get more customers? Furthermore, even if the terms are worded poorly (it's mostly boilerplate, and you'll find somewhat similar terms in lots of places) if Instagram really went out and started selling your photos to appear in, say, a big magazine or TV ad, there would be significant public backlash over that, such that it's probably in their own best interest not to do that without direct permission.

That said, there are a few questionable things in the terms that may lead to legal trouble. When they say: "You acknowledge that we may not always identify paid services, sponsored content, or commercial communications as such" they're asking for a beatdown from the FTC (though, the current Facebook terms include an almost-identical item).

The thing that really surprises me in all of this is that Facebook/Instagram didn't see this coming. Perhaps it's because Facebook seems to do this kind of thing every few months -- in which they change their terms or launch a new feature that has a surprising impact on some element of privacy -- leading to mass complaints and outrage... which all gradually fade away. So maybe Facebook just figures to weather the storm -- and, chances are, for all the people complaining, very few will actually leave Instagram.

Still, earlier this year, Tumblr finally realized that it makes sense to put up plain language terms of service that isn't chock full of legalese (beyond what's necessary) and which include straightforward explanations for what the different clauses mean and how they impact you. It seems like Facebook/Instagram could have cut off a significant amount of criticism of this move if they'd simply done that: better explain in plain language what they're doing and why they're doing it. Instead, just flipping the switch on new terms is bound to set off this kind of firestorm of anger.

There was some controversy a month or so ago, when it came out that app maker Path was secretly uploading your entire address book to its servers. The company apologized and deleted all the data. Of course, pretty quickly, people realized that lots of apps do this, if you allow the app to search your address book to see who else you know is already using the service. The way they do this is to upload your address book. I would have thought this was, well, obvious, but not everyone seemed to think so (it's also why I never use that feature). Either way, lots of apps quickly changed either how they work or how they explain what happens with that feature.

But, of course, in our litigious society, that's not going to stop the class action lawsuits from being filed. In a 152 page document, a class action lawsuit has been filed against pretty much every big name company in the space:

Path, Inc., Twitter, Inc., Apple, Inc., Facebook, Inc., Beluga, Inc. ., Yelp! Inc., Burbn, Inc., Instagram, Inc., Foursquare Labs, Inc., Gowalla Incorporated, Foodspotting, Inc., Hipster, Inc., LinkedIn Corporation, Rovio Mobile Oy, ZeptoLab UK Limited aka ZeptoLab, Chillingo Ltd., Electronic Arts Inc., and Kik Interactive, Inc.,

The lawsuit kicks off by quoting Robert Fulghum's "All I really Need to Know I Learned In Kindergarten," saying, "Don't take things that aren't yours." Of course, as with many such class actions, this one is all about getting the lawyers paid. This isn't to say that I think the actions in uploading the address books were ok, but worth a lawsuit? Seems a bit extreme. It seems that the public pressure about all of this has caused pretty much all of these companies to change how they work, and it's unlikely any real significant "harm" came from this.