Now I've heard it all....

Additionally, in the full ToS, the second item under Rights states "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." In short, Instagram has the right to share content that's already public with advertisers in order to generate revenue.

You're kidding, right?

So what Instragram is trying to claim is that they can take your content and use it for advertising they generate?

Oh I think not.

Watch out for this folks.  Facebook already appears to be doing this, and in some cases might even be making it up, as I've previously reported.  There are serious questions about people allegedly "liking" things when they're dead, or when there's no indication that they did.

All online message systems in some form or fashion expect you to give them a royalty-free license to use your contributions; after all, without that what would they be doing in the first place, and what would you be doing, posting and distributing the material?

But this clause appears to give Instagram the ability to effectively bundle your content with advertisers.  This is vastly different than, for example, a blog or news source (like this one) displaying ads on the sidebar that may be relevant to a user; it is more-akin to the ability to use your content as the gist of the advertisement.

Wait a second -- isn't that what Facebook's "likes" are when they're sold as advertising?

Uh, I think so.  Kinda.  Maybe.

You might want to rethink exactly what "the bargain" is that you're involved with on these sites.... for some it will be fine, but for others (like professional photographers) it may well be time to leave.