Instagram is finding out that when you give users an ultimatum, it usually doesn’t go the way you’d like it to. The photo sharing service made a small tweak to its new terms of policy which caused backlash, and ending with Instagram losing millions of followers.

Late last year, Instagram (owned by Facebook (News - Alert)) released its new Terms of Use policy which will take effect January 19. In the new terms, it stated that Instagram could sell its users photos for advertisement purposes with no royalties due to the users.

Obviously this did not sit well with users especially celebrities, leading them to voice their displeasure. Initial research showed a small drop in users during the first week after the new terms were announced, but numbers continued to hover where they have been for the last few months.

That was until numbers showed that as of January 11, Instagram had lost over 50 percent of its users in just under a month since the new terms were released. Due to the initial backlash, Instagram has back tracked on its views to sell user photos, but the damage was already done.

Users called their bluff and have kept true to their word and have walked away from the app. On December 17 last year, the day before the policy changes came out, Instagram averaged 16.35 million daily users. That number has plummeted with a reported 8.4 million daily users on January 11.

Facebook has obviously denied the decline in users saying in a statement that the numbers are “inaccurate” and that the company “continues[s] to see strong and steady growth in both registered and active users of Instagram." 

Of course Facebook must deny the claims for fear of looking like they are admitting they are wrong, but other companies should take notice and hope to handle a similar situation differently in the future. 

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