The feature, first reported by TechCrunch, was spotted by at least one Instagram user, for whom it was activated by default.
Here are the details.
Instagram user Jane Manchun Wong was exploring the app's Privacy and Security settings when she found a new option - 'Location history'.
If and when implemented, it would allow Facebook to 'build a precise location history' and use it for targeted ads.
Notably, it is not known if it would be an Opt-in or an Opt-out feature.
Responding to reports related to the setting, Facebook said it has not (publicly) updated Instagram's settings and is not collecting location from it.
"We often work on ideas that may evolve over time or ultimately not be tested or released," the statement said. "Instagram does not currently store Location History; we'll keep people updated with any changes to our location settings in the future."
While Google also builds location history using data collected by Maps, the tested setting might worry some, especially if you don't like sharing location with Facebook.
Also, the case comes just a few days after Instagram's founder Kevin Systrom and Mike Krieger resigned from the company.
Now, the app is being headed by Facebook's former VP of News Feed, Adam Mosseri.
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