Instagram to crack down on “hidden” advertising

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British regulators said in a statement Friday that Facebook (FB) has agreed to changes that will make it “much more difficult” for people to post ads on its Instagram platform without labeling them as such. The restrictions apply to all Instagram users around the world, but the platform will only report on how it tracks UK engagements.

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

“These changes mean that there will be no excuse for companies to ignore how their brands are advertised either – making life much more difficult for those who are not forthright and honest with their followers,” Coscelli added.

Social media influencers with thousands of followers often collect fees from companies for promoting their products. Many companies and major global brands are allocating a growing share of their advertising budgets to influencer marketing, especially reaching young consumers who cannot watch TV or read newspapers.

Over 90% of Instagram users follow a business or brand, depending on the platform.The CMA said it had investigated whether too many influencers are posting content on companies without clearly indicating where they were paid or tricked into doing so, when the platform was not doing enough to tackle the problem.

UK Consumer Protection Act states that paid publications are clearly labeled “so that people are not misled,” the CMA said.

Instagram will now ask users to confirm whether they’ve been enticed to promote a product or service and, if so, ask them to disclose it. The “paid partnership” tool, which adds labels to posts, will be extended to all users, and algorithms will be used to spot untagged sponsored posts and report them to promoted businesses, the CMA said.

Instagram will also create a tool for businesses to help them monitor the promotion of their products so they can ask the platform to remove posts if necessary.

A Facebook spokesperson told CNN Business he was “happy to work with the AMC on our ongoing efforts to help people be transparent about when they are paid to post content on Instagram.” The spokesperson said Facebook would report regularly to the CMA on its enforcement actions regarding UK users.

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