Instagram to crack down on ‘hidden’ advertising

Photo provided by CNN.

Is that post on Instagram actually an advertisement? The photo and video sharing platform’s 1 billion users may soon have a better idea if they’re looking at a sales pitch thanks to new measures aimed at combating “hidden” advertising.

UK regulators said in a statement on Friday that Facebook has agreed to changes that will make it “much harder” for people to post advertisements on its Instagram platform without labeling them as such. The restrictions apply to all Instagram users globally, but the platform will only report on how it’s tracking against the commitments in the United Kingdom.

“For too long, major platforms have shied away from taking responsibility for hidden advertising on their site,” said Andrea Coscelli, CEO of the UK Competition and Markets Authority (CMA).

“These changes mean there will be no excuse for businesses to overlook how their brands are being advertised either — making life a lot harder for those who are not upfront and honest with their followers,” Coscelli added.

Social media influencers with thousands of followers often earn fees from companies to promote their products. Many businesses and major global brands are allocating a growing portion of their advertising budgets to influencer marketing, particularly to reach younger consumers who may not watch television or read newspapers.

More than 90% of Instagram users follow a business or brand, according to the platform.

The CMA said it has been investigating whether too many influencers are posting content about businesses without making it clear where they have been paid or incentivized to do so, amid concerns that the platform was not doing enough to tackle the problem.

UK consumer protection law dictates that paid posts are clearly labeled “so that people are not misled,” the CMA said.

Instagram will now prompt users to confirm whether they have been incentivized to promote a product or service and, if so, require them to disclose this. The “paid partnership” tool, which adds labels to posts, will be extended to all users, and algorithms will be used to spot unlabeled sponsored posts and report them to the businesses being promoted, the CMA said.

Instagram will also create a tool for businesses to help them monitor how their products are being promoted so that they can ask the platform to remove posts if necessary.

A spokesperson for Facebook told CNN Business that it is “pleased to be working with the CMA on our continued efforts to help people be transparent about when they are paid to post content on Instagram.” The spokesperson said Facebook will regularly report to the CMA on its enforcement measures regarding UK users.