Instagram debuts new privacy policy, set to share user data with Facebook beginning January 16
As Instagram prepares to scale under its new ownership by Facebook, the company has provided a preview of changes to its privacy policy that will take effect on January 16, 2013.
Context & Ripple Effects
Facebook completed its acquisition of Instagram earlier in 2012, formalized in its welcome to Instagram announcement. Facebook has also said Instagram will be monetized in some form; the January policy change supplies the data-sharing basis for operating the service more closely within Facebook.
First-order effects
- Instagram users will be subject to a policy that permits their data to be shared with Facebook beginning January 16, 2013.
- Facebook gains a stated channel to combine Instagram user data with its own operations as it prepares to monetize Instagram.
Second-order effects
- Instagram's product and advertising decisions can be coordinated more closely with Facebook's existing user-data and commercial systems, reducing the separation between the two services.
- Users and advertisers must evaluate Instagram less as a standalone service and more as part of Facebook's broader platform, with privacy terms becoming a factor in that relationship.
Third-order effects
- The change points to acquired consumer services being integrated through shared data policies as well as branding and product ownership, concentrating the value of audience data at the parent platform.
- If this integration model becomes standard, the competitive advantage of large social platforms will rest increasingly on their ability to connect identity, activity, and monetization across multiple services.
The trend: Social-platform acquisitions are evolving from standalone product ownership into shared-data systems designed to support centralized monetization.