Facebook acquired the photo-sharing service earlier this year.
Users have raised concerns about Instagram’s plans to generate revenue from advertising, claiming that the new terms would let Instagram ‘sell’ photos for use in ads. Mr Systrom responded by saying Instagram did not intend to sell its users’ photos and was working on updating its terms to make this clear.
He also pointed out that that “nothing has changed about the control you have over who can see your photos”.
Update 21st December 2012: Instagram says it's now reverted the advertising section of its Terms of Service to the original version.