[spangborn]

Eh, not quite. Private accounts can't have their photos used outside of Instagram.

>"except Content not shared publicly ("private") will not be distributed outside the Instagram Services.

That doesn't mean they won't be used inside Instagram as ads, however.

[slykat]

There's little difference to me between public on the internet and public on Instagram. They both ignore my photo's original privacy controls (to share with a specific set of users).

Regardless, it looks like Instagram's response has said they will be respecting privacy controls (http://blog.instagram.com/post/38252135408/thank-you-and-wer...) although I'm not convinced until this is made clear in the TOS.