What Should Happen?
Instagram should take the side of their users and intervene. There should be an opportunity for Advertisers to become verified and display that they have been vetted. As part of this, Instagram should create a standard that requires all verified advertising to adhere to all government regulations regarding claims of product performance or benefit.
The outlines for this process are already set forth by the FTC and the FDA. This brings Instagram into the general realm of compliance, where other publishers and media outlets live. It may not be a perfect step, but is it a step forward.
The real problem for Instagram: we are the product; they are selling access to our eyeballs and bank accounts. I’m by no means the first to float this assertion, but viewing the relationship this way makes it is easy to understand why the platform has little incentive to address this issue.