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It doesn't have to be legally binding. The damage it can do to a reputation is deterrent enough.

And it's not difficult to see how adopting it can have benefits: http://blog.flickr.net/en/2011/05/13/at-flickr-your-photos-a....

A lot of people are abandoning Instagram not because of the ToS per se, but because they were reminded that it is now owned by Facebook. And Facebook's reputation is horrible.

Look at what Tumblr are doing by posting their policies on GitHub, which lets everyone see the diffs: https://github.com/tumblr/policy.

Goodwill doesn't have to be legally tethered. But it can be.



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