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Instagram's answers don't cover the biggest issue [Update]

(MoneyWatch) There was a minor consumer uproar when Instagram, part of Facebook (FB), changed its terms of service to apparently allow it to make money off the photos users uploaded and their identities as well. The company has answered criticisms with a blog post, but what it says fails to address an important criticism: The new ability to put users into advertisements to promote third party advertisers without further permission.

Many who read the new Instagram terms of service thought that the company -- and therefore its parent, Facebook -- was taking ownership of their photos and would sell them. Here is the response from the Instagram blog:

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.

Furthermore, the company said that it does "not have plans" for including someone's photos in advertisements and so will remove that part of the language.

However, a potentially more contentious part of the new language that the blog post does not address is the new ability for Facebook to put the likenesses and user names of Instagram users into advertisements. Facebook has already tried to put people into ads without permission. The result was a $10 million settlement of a user lawsuit earlier this year. If language about displaying user names and likenesses remains, then the company's answer about wanting to "experiment with innovative advertising that feels appropriate" would still mean that people could find themselves in ads for third party products and services, only without the ability to sue.

When asked about this aspect of the new terms language, a Facebook spokesperson said the company had "nothing to share beyond the blog post at this time" and that, in general, it doesn't comment on future plans, which could include changing the terms for Facebook, not just Instagram, to allow putting people into ads without further permission.

[Update: Instagram has again updated its terms of service to revert the advertising section back to the original version. In the blog post, Instagram co-founder Kevin Systrom said that the company would not change terms in advance of new advertising services. However, the company reserved the right to develop new advertising products and then to explain them to users.]

Graphic: Erik Sherman

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