Facebook-owned Instagram has been forced to clarify its usage policy after users threatened to abandon the photo-sharing service over fears of their images being used for commercial purposes.

The company's new terms of use, which are due to come into effect on January 16th, had stated that although it did not own photos, users were deemed to have granted Instagram a royalty-free, transferable licence to use content.

But the provision that got the most attention was the one that said users agreed that businesses or other entities could pay Instagram to display user names, likenesses, photos and other information in connection with paid or sponsored content or promotions, without any compensation for users.

The company moved to clarify its position, saying it had mistakenly used confusing language.

"Since making these changes, we've heard loud and clear that many users are confused and upset about what the changes mean," founder Kevin Systrom wrote in a blog post last night.

"The language we proposed also raised question about whether your photos can be part of an advertisement. We do not have plans for anything like this and because of that we're going to remove the language that raised the question."

Instagram, which has more than 100 million registered users, is seeking ways to make money from the service. The company is exploring the possibility of using advertising the service, but warned it may not always be clearly marked as such.

Facebook bought Instagram in April in a deal worth $1 billion. The new terms of use are intended to allow the two companies to integrate their services more closely.