A picture may be worth a thousand words, but by Tuesday afternoon Instagram amassed many more as it faced the wrath of users angered by the photo-sharing service's new privacy policy and terms of service.

Most loathed among the new conditions:

“You hereby grant to Instagram a non-exclusive, fully paid and royalty-free, transferable, sub-licensable, worldwide license to use the content that you post on or through the 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. You acknowledge that we may not always identify paid services, sponsored content, or commercial communications as such.”

Translation: Your personal content is now company property.

That new policy has already prompted thousands of users to bail. Could the fallout go beyond the loss of snap-happy foodies and duck-faced self pic aficionados, perhaps landing at the doorstep of a regulator?

In March, the Federal Trade Commission issued a report, “Protecting Consumer Privacy in an Era of Rapid Change: Recommendations for Businesses and Policymakers,” and a voluntary framework of best practices for businesses as they collect and use consumer data. Within that framework, Instagram appears to be fine and dandy regarding an all-important call for “transparency.” Its new policy was, after all, posted and promoted well-ahead of implementation, and users were given a very clear-cut alternative – deleting their account by Jan. 16.

On Tuesday, just as the outcry of disgruntled Instagram defectors reached critical mass, the Federal Trade Commission also issued orders requiring nine data brokerage companies about how they collect, use and resell the consumer data they mine, and the extent they allow consumers to access and correct their information or opt out of having their it sold.  

That effort is not likely to be an immediate concern for Instagram, other than, perhaps, as an omen of a forthcoming, broader crackdown on social media sites once data brokerages are run through the ringer. Should that come to pass, however, the much-maligned user agreement may prove problematic.

"We may share user content and your information with businesses that are legally part of the same group of companies that Instagram is part of, or that become part of that group,” it says. For now, that may good enough to keep the FTC and others focused elsewhere, but what if Facebook sets its sights on buying a data broker, or becomes even more of one itself (after all, isn't leveraging that sort of data at the core of its business model)?

Another red flag waved in Instagram's direction is how it treats minors using its service.

Earlier this month, the FTC issued a follow-up to a 2011 survey, “Mobile Apps for Kids: Disclosures Still Not Making the Grade.” It found a lack of progress providing parents information on data collected from their children, how it is shared, and who has access to it. 

The report adds – and this, we speculate, is where Instagram and its parent company Facebook may fit in – that the “FTC staff is launching non-public investigations to determine whether certain entities in the mobile app marketplace are violating the Children's Online Privacy Protection Act (COPPA).” That legislation prohibits the collection of online information from children younger than 13.

Here's how Instagram addresses the issue: “[We do not] knowingly collect or solicit any information from anyone under the age of 13, or knowingly allow such persons to register for the Service. In the event that we learn that we have collected personal information from a child under age 13 without parental consent, we will delete that information as quickly as possible.”

Is that sort of disclaimer enough? We may gain fresh insight on Wednesday when the FTC announces an update to COPPA at an event in Washington D.C.

In a Dec. 13 letter urging the expansion of COPPA, more than 60 groups (among them the American Academy of Pediatrics, the American Psychological Association, the U.S. Conference of Catholic Bishops, and Consumers Union), petitioned the FTC to modernize the legislation and address technologies that didn't exist when it was enacted in 1998.

"These rule changes are not only essential, but also urgent, addressing a variety of techniques that are swiftly becoming commonplace, including: 'cookies' and other 'persistent identifiers' for following a child online, mobile and geolocation tracking, facial recognition software, and behavioral advertising," they wrote.

Instragram's new terms disclose its use of "cookies, log files, device identifiers, location data, and usage data," none of which are unique to a social media site of its type.

Even assuming that Instagram has nothing to fear from a freshly updated COPPA, what about the 14-17 year olds not currently covered by it? Might regulators find it sketchy, if not actionable, that minors can have their image appropriated, without consent, for advertising and who-knows-what-else? Can their “property” be re-purposed just because the fine print of a website says it can, even in the absence of parental approval? Are state privacy laws that prohibit the use of a person's image without consent effectively bypassed by the implied consent that comes with use of the service?

“If you are under the age of 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,” Instagram says in its new terms, attempting to bypass that sort of problem.

On Tuesday afternoon, Instagram issued a statement about the controversy, retreating from some of the language that caused it.

"Legal documents are easy to misinterpret. So I'd like to address specific concerns we've heard from everyone," wrote co-founder Kevin Systrom.

"Advertising is one of many ways that Instagram can become a self-sustaining business, but not the only one," Systrom said. "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," he added. "We do not have plans for anything like this and because of that we're going to remove the language that raised the question."