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A hot potato: Instagram has found itself in hot water after the UK's Competition and Markets Authority (CMA) discovered that many commercial arrangements between companies and influencers aren't being fully disclosed. Consumer regulations require commercial posts to be clearly labeled. A CMA probe found that this isn't happening much of the time.
Instagram rules in the UK and elsewhere state that commercial arrangements between users and companies must be fully disclosed using the #ad or #sponsored hashtags. These rules make it clear that a published post is getting compensation either in the form of payment or a free, "gifted" product. Typically, these kinds of arrangements are made between companies and high-profile Instagram "influencers."
However, an investigation by UK's CMA found social media influencers aren't making such commercial arrangements clear most of the time. The CMA also concluded that Facebook-owned Instagram isn't doing enough to solve this problem. In a bid to avoid legal action for failing to comply with consumer law, Instagram is making a few changes.
"Instagram is required to involve businesses in the changes by creating a tool to help them monitor how their products are being promoted."
First, Instagram will prompt users to reveal whether they've been paid or incentivized to promote a product or service. If they have been, the social network will require users to disclose this.
Second, Instagram is making its "paid partnership" tool available for all users, making it easier for anyone to display a label at the top of their post disclosing a commercial arrangement.
Lastly, Instagram has vowed to use technology and algorithms to detect instances where a commercial disclosure hasn't been made and will report these users to their associated businesses in a bid to clamp down on influencer rule-breakers.
"Under the commitments, Instagram is also required to involve businesses in the changes by creating a tool to help them monitor how their products are being promoted," said the CMA. "As a result, businesses should do their part to comply with consumer protection law and take action where appropriate, including asking the platform to remove posts if necessary."
The CMA also asked Instagram to report its progress to the agency and provide updates on how it is achieving each of its three pledges.