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Amateur hour at Instagram-parent Facebook

A big company that's getting bigger all the time is in danger of alienating the same people who helped make it rich and famous: The users.

Charles Cooper Former Executive Editor / News
Charles Cooper was an executive editor at CNET News. He has covered technology and business for more than 25 years, working at CBSNews.com, the Associated Press, Computer & Software News, Computer Shopper, PC Week, and ZDNet.
Charles Cooper
3 min read
James Martin/CNET

From the outset, let's note a couple of points that ought to be abundantly clear to anyone watching the unfolding controversy about the upcoming changes to Instagram's terms of use.

A) Instagram -- and thus by definition, Facebook, the site's corporate parent -- is entirely within its rights to change the terms of use governing how photos uploaded by people using the service get used.

B) Facebook's management is comprised of incredibly smart folks.

Given that A and B are true, the powers that be who are running the company must either be amazingly tone deaf or crazy as loons.

It's obviously not the latter, so we're left with the conclusion that the people at the top, so impressed by the sound of their own voices, have lost touch with the people who helped turn them into gazillionaires -- in other words, the users.

Instagram on Monday announced that it has the right to sell users' photos without payment or notification. What's more, there's no way to opt out. Instead, the service is giving users until January 16 to delete their accounts.

This isn't the first time Facebook has found itself at the center of a drama it helped create by unilateral decisions affecting its users. But in years' past, the initial outrage passed relatively quickly into resignation and then acquiescence. Such was the case with Facebook's news feed, with sponsored stories, and, more recently, Timeline. In each instance, the service's users got used to the change.

This time the storm isn't likely to blow over so quickly.

Inside Scoop: Instagram backpedals on new privacy rules
Watch this: Inside Scoop: Instagram backpedals on new privacy rules
Data is data, but when you're talking about a multibillion-dollar corporation making money on photos of your Aunt Sarah or of Max, your darling cat, that's a world of emotion different than Facebook monetizing a "Like." As CNET's earlier coverage noted, the upshot is that hotels could pay Facebook to license photos taken at its resort and use them anywhere without paying a cent to the Instagram users who snapped the shots.

That's more than the usual amount of chutzpah. As my CNET colleague Nathan Bransford noted, imagine the blowback if Microsoft now said that it owned all the novels ever written on Microsoft Word. Safe to say that more than a few users would not be pleased. So why did Facebook decide to stir up a hornet's nest? Since the company has hunkered down in the last 24 hours, we're only left to wonder how Mark Zuckerberg and Sheryl Sandberg could let this one slip. Facebook spent a pretty penny to buy Instagram, so it's easy to assume they believe they have the right to arrogate the information users have shared for the benefit of advertisers in Facebook's ad network. That's the way big companies think, and now that Facebook is publicly traded, the pressure to boost profit margins is more intense than ever. (The Guardian's Josh Halliday had it right with his headline quip that Instagram has made you the product.)

If I'm reading the situation correctly, Facebook is betting that most people won't opt out -- either because they're already too invested in Instagram, or because they're just not deep in the details and don't know about any of this terms-of-use stuff (though given the news coverage, that may no longer be true.)

But even Zuckerberg's sister Arielle apparently thinks this is an odd move to make. And it is. And here's what simply doesn't compute: In the past, when Facebook had privacy flubs, Zuckerberg would eventually come out of his cocoon, offer the requisite apologies and Facebook would turn the page. If past is prologue, he'll likely do the same here, though it's a wonder the company still hasn't learned how to deal with its public.

Experience is supposed to be the great teacher, but while Facebook may have grown up, apparently it's not yet enough.

Update Tuesday afternoon, Instagram issued a statement clarifying the upcoming changes.