Advertising watchdog slams Roblox because of paid-for influencers shilling Robux without disclosure 'children can understand'

The Children's Advertising Review Unit (CARU) is a self-regulatory body in the United States, and it's one that focuses on how things are being marketed to children under the age of 13 across all forms of media. In recent times it's been looking closely at the metaverse, and issued a compliance warning about this area in August 2022. Now it's taking aim at Roblox, one of the biggest and most profitable gaming/creation platforms around, and one where 43% of the playerbase is under the age of 13.

CARU has found Roblox in violation of various of its guidelines, and in particular found that how it conducts advertising through paid-for influencers lacked adequate disclosure (thanks, GI.biz). It noted that, even when disclosure may have been present, that did not mean it was made in a way kids would understand.

"CARU found that social media influencers in Roblox’s Influencer Program who had large child audiences did not clearly and conspicuously disclose their material connection to Roblox in their videos in a way children can understand," said CARU's statement, "and that influencers in the Video Stars Program who promoted their unique Star Code did not clearly and conspicuously disclose, in a way children can understand, that they will receive a commission when Robux (Roblox currency) are purchased."

CARU said it had found the following problems, and outlined what it had requested as remedies from Roblox Corporation:

• Roblox did not adequately disclose to children when advertising is present within “experiences” on Roblox. CARU recommended that Roblox ensure that advertisements are clearly and conspicuously identified as ads in language and/or audio that children can see, hear, and easily understand.
• Roblox did not adequately disclose to children when content integrated into a video is advertising. CARU recommended that Roblox clearly and conspicuously disclose to children in language and/or audio that they can see, hear, and easily understand that the integrated content in the video is advertising.
• Roblox did not take adequate measures to ensure that social media influencers with child audiences adequately disclose material connections. CARU recommended that Roblox monitor their endorsers and influencers to ensure they are clearly and conspicuously disclosing their material connection to Roblox in a way that children can easily understand.

CARU went on to criticise the guidance and tools Roblox provided to influencers, and a general lack of understanding of best practice in disclosure to children in that area. It noted that some of the issues it had noticed would be addressed by an upcoming change to Roblox's advertising standards on June 15 (which stem from a separate complaint to the FTC), but it remains concerned about how the company uses influencers.

This matters because CARU is a self-regulatory body that carries a big stick. It's been around since 1974 but in 2001 became the first Federal Trade Commission-approved Safe Harbor under the Children's Online Privacy Protection Act (COPPA). What this means is that companies who adhere to CARU's guidelines and do what they're told to when a problem arises will be deemed in compliance with COPPA: But if CARU isn't happy, they can remove that protection and open up a corporation to potentially ruinous FTC enforcement. Roblox is of course very far from facing anything like that, given the steps it continues to take, but this does put the company on notice about questionable practices in how children are sold to by influencers on the platform.

For its part, Roblox Corporation notes it has already "made policy changes regarding child-directed advertising that render many aspects of the Decision moot." The company said it disagrees with "some of the recommendations and statements made in the decision" but agreed to "comply with CARU’s recommendations regarding influencers and ask that our influencers with child-directed content use the word 'paid' in their disclosures." I mean, it's pretty stunning that this wasn't already a rule, but at least you got there in the end.

Roblox continues to boom: If its daily active users were a country, it would be bigger than Canada. The platform has faced sustained criticism in recent years from concerned parents, as well as investigations into scammers targeting kids, as well as the wider question of whether its creator economy is exploitative, but none of this seems to have dented its popularity, or profitability: Roblox Corporation's CEO is going to pocket $234 million over the next five years. In such context, advertising responsibly to kids doesn't seem like a big ask.