In case you were wondering, yes, Instagram is indeed owned by Facebook

Again, are we surprised?

In his (sort of) apology/explanation,  Kevin Systrom co-founder, Instagram, says: 

"Some or all of the service may be supported by advertising revenue. To help us deliver interesting paid or sponsored content or promotions, you agree that a business or other entity may pay us to display your username, likeness, photos (along with any associated metadata), and/or actions you take, in connection with paid or sponsored content or promotions, without any compensation to you"

I was going to add some commentary but Randal Munro says it way better in xkcd