Here’s the official word from Instagam’s blog:
It would seem that the real difference lies in what Instagram does with your personal data. The company promises that you’ll still have complete control over who can see your content and where it is shared, but Facebook and Instagram will certainly be getting a bit more comfortable with one another where user information is concerned.
We may share User Content and your information (including but not limited to, information from cookies, log files, device identifiers, location data, and usage data) with businesses that are legally part of the same group of companies that Instagram is part of, or that become part of that group (“Affiliates”). Affiliates may use this information to help provide, understand, and improve the Service (including by providing analytics) and Affiliates’ own services (including by providing you with better and more relevant experiences). But these Affiliates will honor the choices you make about who can see your photos.
Instagram’s “Information Storage” section also accounts for Facebook, adding an “affiliate” mention to the part where Instagram explains that it can transfer the data it collects on you between international locations (emphasis added to denote the addition in the new version):
Instagram, its Affiliates, or Service Providers may transfer information that we collect about you,including personal information across borders and from your country or jurisdiction to other countries or jurisdictions around the world.