It is starting to look like Instagram could suffer seriously from its control freak antics. While the company quickly realised that its plans to nick the photographs of users without paying for them simply by changing the terms and conditions would not really fly, it seems that customers see the brand as contaminated.

According to data provided by app traffic company AppStats, Instagram has lost more than half of all its active users in the month since proposing to change its original Privacy Policy and Terms of Service. In mid-December, Instagram boasted about 16.3 million daily active users; as of January 14, Instagram only has about 7.6 million daily users.

The figures show that the photo-sharing app continues to gain monthly active users so all is not lost, but it does indicate how careful companies have to be about their customers perceptions. In this case it was a listing in the new terms and conditions which said that users granted the company a non-exclusive, fully paid and royalty-free, transferable, sub-licensable, worldwide license to use the content that you post on or through the service.

But there was no guarantees that that the person’s snaps could not be used on Facebook advertising. Instagram quickly tried to plug the leak when users complained about the new approach by reverting to its original privacy policy. The company was badly hit in the UK, where fears of the loss of digital privacy are greater.