A well-retweeted comment last night suggested Instagram’s rewritten terms of service were the company’s “suicide note”. We’re not sure we’d go that far, but we can see why they’re controversial.

“Nothing has changed about your photos’ ownership or who can see them,” claimed Instagram in a blog post. Maybe not, but the Facebook subsidiary wants users to agree that their photos can be used by advertisers, while suggesting that it won’t always make it clear that ads are, well, ads.

Here’s the first clause that’s sparking online discussion: “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.”

It happens on Facebook too, but there doesn’t appear to be an opt-out on Instagram: by continuing to use the service, users confirm that they agree to the terms. Their only way of disagreeing is to not log in.

Now the second controversial clause: “You acknowledge that we may not always identify paid services, sponsored content, or commercial communications as such.” Something that may well spark interest from regulators on both sides of the Atlantic, and which again seems out of kilter even with the policies of Instagram’s parent company.

The changes are the latest reminder that free social services and apps ultimately have to make money somehow, usually advertising. But this row isn’t about Instagram users’ unrealistic expectations of keeping the free app ad-free.

The problem here is that these new clauses don’t feel like the Instagram many of those users signed up to: an unpleasant corporate cultural change.

Instagram was never just about adding pretty filters to photographs – a feature that Twitter, Facebook and numerous other apps are busily commoditising. Instagram was about its community and creative ethos.

Selling its users to advertisers and pretending ads aren’t ads jibes mightily with that, even if they’re an accurate sign (along with its decision to block images from appearing within Twitter) of the kind of company Instagram is becoming at the close of 2012.