Instagram to add 'sponsored post' label for transparency

Facebook-owned service Instagram is testing a dedicated label to highlight sponsored posts for better transparency on its platform, once questioned by US authorities.

The move to add a ‘sponsored post’ label comes after US Federal Trade Commission (FTC) set out about 100 letters to celebrity Instagram “influencers” to be more transparent with their sponsored posts.

Instagram is used by million of celebrities who have built a significant following for themselves and hawk products on the social networking platform. However, many still fail marking their posts as advertisements.

In the letters, the commission had advised those celebrities that they must disclose compensation of promoting products on social media.

In a statement to Reuters, Instagram confirmed to add a ‘paid partnership with' label that would appear above the pictures. The label would be voluntary, but is expected to be used because some users requested it, Instagram told Reuters.

"As more and more partnerships form on Instagram, it's important to ensure the community is able to easily recognize when someone they follow is paid to post content," the company said.