But 12 people are said to have complained that not all entrants were included in the "final draw".
The Advertising Standards Authority (ASA) said the £8,000 value prize - which included Louis Vuitton luggage, Apple products and goods from her tanning range - was not administered fairly and was not found to be in accordance with the laws of chance.
The ASA subsequently warned the influencer to ensure all contests and giveaways are fair in future, and to use computer software to ensure that prizes are given at random, and not to those with more "visibility".
They highlighted that, currently, the Instagram algorithm favours users with more followers and likes, pushing them to the top of the comments section.
Verified users, for example, are more likely to be seen than regular Instagram accounts.
Molly-Mae's competition ran back in September last year, and was in honour of the fact she hit one million subscribers on YouTube.
"I can't put into words what this means to me," she said at the time. "Since the age of 16 I've had this dream and goal in my mind and today we did it....my mind is blown.
"Without you guys this dream would never have become a reality, so it's only right that I give back.
"THIS IS MY CRAZY GIVEAWAY!!!! The thought of one of you receiving all of these things makes me so happy, I can't wait to see who wins!
"To ENTER my giveaway and be in with the chance of winning £8000 worth of gifts (NO SPONSORS ALL FROM ME!) then follow the steps below: like this post & tag a friend, subscribe to my YouTube, make sure you're following @mollymaehague and @filterbymollymae, share this post to your story for a bonus entry.
"You must complete all the above points for your chance to win. The more you tag the more chance you have of winning!"
Molly said the post did not provide an incentive to engage with a brand or a product and therefore believed the post was not a promotion and did not fall under the CAP code (which would mean she would have to disclose it as an ad).
She said she had instructed a member of her management team to pick a group of participants at random that could be publicly seen to be following her profiles. These were all manually selected out of a hat.
The reality star said that she sorted the winner this way due to the high number of entrants, which prohibited the use of computer software, as advised.
Each of the 100 participants shortlisted from the post's entrants were manually checked to verify that they had followed all profiles Molly asked for, and had completed each step of the competition requirements.
If they hadn't, they were replaced with a different individual.
From that final group of 100 entries, the winner was chosen using a Google number picker, Molly explained.
The reality star said the response to the promotion was "overwhelming and unexpected."
However, the ASA said, that Molly should have anticipated such a response to a prize draw worth thousands, which she had posted to her five million followers.
Over a million people liked the post, and almost three million comments were left on it.
The watchdog said: "We understood that computer software was available which could have made a random selection from the respondents to the post, but that Ms Hague had chosen not to use it.
"Instead, Ms Hague's response to the complaints stated that a group of 100 participants were chosen at random out of a hat, from which a winner was chosen by a computer programme.
"However, we had not seen evidence to show that the initial selection was made randomly.
"It was not clear what the size of the pool of entries was from which the smaller group was drawn from the hat, or what criteria had been applied to select them, other than that they were publicly following Ms Hague's profile.
"We understood from Ms Hague's response that the full competition requirements had only been applied to the selected group of 100 entries.
"At the same time, an Instagram Story from Ms Hague's account after the promotion's closing date stated that a smaller shortlisted group of 25 was entered into a computer programme to determine the winner, and stated that all those selected had entered more than once.
"We were concerned by the inconsistencies in the information provided, but in either case, we had not seen evidence to show that the shortlisted participants were chosen randomly.
"Although Ms Hague indicated that the eventual prize winner was selected randomly using computer software, we had not seen evidence to show that was the case either.
"We had not seen evidence that the prize was awarded in accordance with the laws of chance and by an independent person or under the supervision of an independent person."
An ASA spokesperson further added: "We told Molly Mae Hague to ensure their future promotions were administered fairly and that prizes were awarded to genuine winners in accordance with the laws of chance and by an independent person or under the supervision of an independent person."
Featured Image Credit: Instagram/ Molly-Mae Hague
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