Roblox ads ‘exploit’ users, FTC advocacy group claims

Advertising in the metaverse is tricky.

Truth in Advertising, a non-profit organization that aims to protect consumers from “misleading advertising and deceptive marketing,” filed a complaint Tuesday with the Federal Trade Commission alleging that Roblox has “completely evaded responsibility” by following advertising laws on the children’s game platform. the full complaint names several major US-based companies, including Netflix, Nike, Hasbro, and Mattel, as companies that have games on the platform that use deceptive marketing practices.

Roblox is a gaming and “metaverse” platform aimed primarily at children. Many games, which Roblox Corp. calls “experiences”, are created by users of the platform, not by the company itself. However, over the past few years, more and more big companies have started using Roblox games to advertise their products. Hasbro released a Nerf Gun shooter; Mattel released an open-world Hot Wheels game; and most recently, Sega of America partnered with a company to release a Sonic the Hedgehog game on the platform. In its complaint, Truth in Advertising claims that “advertising is being surreptitiously pushed onto millions of unsuspecting Roblox users” because a “public company failed to establish meaningful safeguards to ensure compliance with the truth in advertising laws on its platform”.

The report extensively describes and lists various issues with advertising practices on Roblox, but much of it is unbranded or undisclosed advertising in different forms. (Disclosed advertising, for example, occurs when an influencer uses #ad on TikTok, which this platform asks users to include if the post is a paid promotion so that they respect FTC Guidelines.) Truth in Advertising says it can be difficult for young children to distinguish between what they call “advergames” – games created to promote specific brands or products – and regular games created by users. The report gives an example of a search for stranger thingsthe search results being unclear as to the difference between the paid Netflix game and the fan-made ones.

According to the Roblox Community Guidelines, developers who place ads in their games “remain responsible for all advertising content” and must follow the “Community Rules, Terms of Service, and all other Roblox Rules.”

Contacted to comment on the complaint, Roblox Corp. issued the following statement to Polygon:

Roblox is committed to ensuring our users and developers have a positive and safe experience on our platform. We have strict guidelines for developers who want to promote or use ads in their experiences, including specific rules to protect users under 13, expectations that all developers adhere to Community Standards which we strictly enforce, and no tolerance for fraud or scams. We have strict policies and monitoring processes aimed at combating content to exploit or deceive users. We’re also making significant investments in new ways to allow creators to be compensated for their efforts while ensuring ad experiences are transparent and compliant with applicable laws and regulations.

The 44-page complaint from Truth in Advertising goes on to mention specific instances of deceptive marketing practices that can occur in Roblox. For example, there are real gamers who serve as brand ambassadors for virtual content on the platform and interact with users in Roblox games. The complaint lists Nike influencers who spend time on Roblox and “purchase” Nike hardware and talk to people playing the Nike game, but are not “disclosed in hardware connection with Nike” within Roblox.

Additionally, the Truth in Advertising report takes issue with “undisclosed” or untagged Roblox avatars who engage in promotional activities, such as giving away or selling in-game items. This could apply to any untagged NPC who sells in-game content, but the report also points out that celebrity-inspired avatars, like that of LeBron James, have been used in promotional exchanges.

“Wherever mentions take place, advertisers must fulfill their duty to ensure that the form, content and disclosure used by any influencer, at a minimum, complies with the law. Even in the metaverse, companies are legally responsible for ensuring that consumers, regardless of age, know that what they are viewing or interacting with is an endorsement,” Truth in Advertising said. “And despite the transient nature of avatar influencers participating as walkers and talkers within the Roblox metaverse, no brand (including Roblox) is allowed to ignore its legal obligation to disclose these endorsements.”

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