Instagram's updated Terms of Service and Privacy Policy takes effect Saturday, the company reminded its users in e-mails sent Tuesday. At the same time, AppStats data shows the photo-sharing app has lost around 42 percent of its daily active users in the last month.

Instagram had a bumpy end of the year after unveiling a new TOS that included an updated advertising policy. Many interpreted the update to mean Instagram could sell users' photos and information to advertisers. Users went nuts, some quit Instagram altogether, and the company said it was all a misunderstanding before reverting to its 2010 advertising policy.

Even so, it appears to have taken a toll on the app's user base. AppStats, which tracks active users for Facebook-connected applications, shows Instagram gradually losing its daily active users during the last month. Instagram had more than 15.6 million daily active users on Dec. 15. One month later, that number stood at around 9 million, a decline of 42 percent.

Up until January 8, AppStats pulled its data directly from Facebook's API. Facebook removed Instagram user counts from developer APIs, however, after reports that Instagram's traffic was low going into the holidays. Since then, AppStats CEO Sebastian Sujka said, his firm's numbers for Instagram are "an estimation based on several factors like long term and short term trends."

That said, AppStats finds Instagram's monthly active users growing steadily. The app had 41.5 million monthly active users in mid-December, which has grown to 46.1 million monthly active users today. In essence, more people are using Instagram, not just as often.

"This likely means that Instagram was losing quite some DAU — daily active users, or power users so to speak — whereas the popularity of people using Instagram keeps growing," Sujka told Wired. "This makes intuitive sense to me, as the more active users will have posted way more pictures and, hence, react more sensitively."

The updated Terms of Service and Privacy Policy taking effect Saturday does not include any ambiguous advertising language. Instead, the user agreements have changed to help Instagram more easily share data with Facebook by moving all of Instagram's data over to Facebook's servers, according to the company. This will supposedly help the photo sharing app fight off spam and quickly detect system or reliability problems.

"And remember, these updates don't change the fact that you own your photos that you post on Instagram, and our privacy controls work just as they did before," the email reminder to Instagram users stated.

We'll see whether that's enough to boost user confidence in Instagram so that daily active users start increasing again.