They were reversed in less than 24 hours, along with a sincere apology from the CEO, but Instagram's proposed changes to its terms and conditions may have cost the photo-sharing service a quarter of its users.
UPDATE: Instagram has since denied the fall is users, saying in a statement sent to Gizmodo: "This data is inaccurate. We continue to see strong and steady growth in both registered and active users of Instagram."
Figures collected by AppData and published by the New York Post claim that Instagram hit a peak of 16.4 million active daily users the week it announced upcoming changes to its T&Cs, and this has now dropped to 12.4 million.
On 18 December the profitless photo-sharing service, which was acquired by Facebook earlier this year in a deal originally worth $1bn, announced plans to change its terms and conditions, which suggested that the firm would sell users' photos for use in advertising, and with no royalties returned.
The news spread across the internet like wildfire, prompting users to say they were closing their Instagram accounts in protest; less than a day later, Instagram CEO Kevin Systrom issued a blog post apologising for the vague language used in the updated terms, and that the service would not be selling users' photos.
"[We are] pretty sure the decline in Instagram users was due to the terms of service announcement," AppData told the NY Post.
While the data doesn't reveal how many of Instagram's 100 million users closed their accounts during the 24-hour furore, it does show a significant drop off in daily active use.
The drop could be due to less users visiting social networks during the Christmas holiday, but just before the backlash Instagram's busiest ever 24 hours was recorded over Thanksgiving, when users shared more than 10 million photos.
AppData said Instagram's daily active users had dropped to 12.5 million by Christmas Day, representing a drop of 25 percent from just weeks earlier, no doubt a cause for concern for the San Francisco-based company.
The CEO apologised for Instagram's failure to "communicate our intentions clearly," adding: "Going forward, rather than obtain permission from you to introduce possible advertising products we have not yet developed, we are going to take the time to complete our plans, and then come back to our users and explain how we would like for our advertising business to work."