The photo and video platform Instagram, which is owned by Facebook, has agreed to take steps that crack down on hidden ads on its site by so-called influencers, the Competition and Markets Authority (CMA) of the United Kingdom (UK) said.
Influencers on Instagram with a huge number of followers usually receive large payments from businesses to advertise or recommend a product.
Facebook Ireland, which runs Instagram in Britain, has committed to a package of improvements in what the CMA identified as an significant behavior shift by the major social media site.
“This will make it much harder for people to post an advert on Instagram without labelling it as such,” the CMA said in a statement.
Facebook stated that it was pleased to collaborate with the CMA on its ongoing initiatives to improve transparency on when influencers are paid to share content on Instagram.
“We are also proud to be launching a program to help educate young people about branded content and how to identify it,” Facebook added.
The CMA said it was investigating complaints that too many influencers are sharing branded content without making it clear whether they have been paid or given other incentives to do so.
If they have earned some incentives to promote a product or service, influencers would have to confirm and reveal it.
The CMA said that Instagram would also use technology to identify when users may not have specifically disclosed that a post is an advertisement by next year. Appropriate action will be taken against those businesses including demanding the removal of posts from Instagram.
In the UK, hidden advertising is illegal. Under consumer protection legislation, accurate labelling of paid posts are mandated so that consumers are not misled.
The announcement applies to all users in the UK as well as to anyone worldwide who directs their posts towards users of Instagram in the UK.
Instagram promised to extend its ‘paid partnership’ tool to all users following the decision, allowing individuals to easily display a clear label at the top of a post.
Market spending on influencer ads has gradually grown over the past few years, hitting nearly $500 million in the second quarter of this year, according to analytics company Instascreener. Latest data rates the influencer market of Instagram at $1billion.