3. From the new terms of service
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. If you are under the age of eighteen (18), or under any other applicable age of majority, you represent that at least one of your parents or legal guardians has also agreed to this provision (and the use of your name, likeness, username, and/or photos (along with any associated metadata)) on your behalf.
What this means is that Instagram can now effectively sell the use of your username, profile picture, photos you’ve taken and records of what you’ve liked or commented on to another company — like an advertiser — and they don’t have to pay you in order to do so. And you can’t stop them.
Facebook’s terms in this regard are similar, but Facebook does explicitly grant you the ability to adjust how your name and profile photo are used for ads and commercial content:
You can use your privacy settings to limit how your name and profile picture may be associated with commercial, sponsored, or related content (such as a brand you like) served or enhanced by us. You give us permission to use your name and profile picture in connection with that content, subject to the limits you place.
Another section, pointed out by Mike Isaac, seems downright disingenuous:
You acknowledge that we may not always identify paid services, sponsored content, or commercial communications as such.
But it’s also in Facebook’s terms of service:
You understand that we may not always identify paid services and communications as such.
We may also share certain information such as cookie data with third-party advertising partners. This information would allow third-party ad networks to, among other things, deliver targeted advertisements that they believe will be of most interest to you.
Facebook does this as well and it’s making a killing off of it.
We may share User Content and your information (including but not limited to, information from cookies, log files, device identifiers, location data, and usage data) with businesses that are legally part of the same group of companies that Instagram is part of, or that become part of that group (“Affiliates”). Affiliates may use this information to help provide, understand, and improve the Service (including by providing analytics) and Affiliates’ own services (including by providing you with better and more relevant experiences). But these Affiliates will honor the choices you make about who can see your photos.
In a larger sense, Instagram (or Facebook on behalf of Instagram) has asked for, and effectively given itself, free reign to do with your data as it pleases, into perpetuity. Wisely, it did so at a time when Instagram still feels small and personal. A time when people still trusted it.
There’s an adage that’s basically a cliche in tech now: If you are not paying for it, you’re not the customer; you’re the product being sold. Well, there’s a reason that it’s become cliche, and that’s because it’s true — over and over and over again.