Roblox ads are ‘exploiting’ users, FTC complaint from advocacy group says

Advertisement in the metaverse can be difficult.

Truth in Advertising, a nonprofit organization that aims to protect consumers from “false advertising and deceptive marketing,” filed a complaint Tuesday with the Federal Trade Commission alleging that Roblox has “completely shirked its responsibility” in following advertising laws on the kids gaming platform. The complaint details several large U.S. companies, such as Mattel and Nike, that offer games that engage in deceptive marketing.

Roblox is a gaming and “metaverse” platform that primarily caters to children. Many of the games, which Roblox Corp. calls “experiences,” are made by users of the platform, not the company itself. Over the years, Roblox has seen a rise in big-name brands using Roblox games for their product promotion. Hasbro has released a Nerf Gun Shooter. Mattel launched an open-world Hot Wheels Game. Sega of America also partnered up with Mattel to bring a Sonic the Hedgehog title on the platform. In its complaint, Truth in Advertising says that “advertising is being surreptitiously pushed on millions of unsuspecting Roblox users” because a “public company has failed to establish any meaningful guardrails to ensure compliance with truth in advertising laws on its platform.”

While the report is very detailed in describing and listing various issues regarding advertising on Roblox it also focuses on unmarked advertising, or not disclosing advertising of different types. Disclosure is, by way of example, when an influencer shares a #ad via TikTok. Users must include this information if they are promoting a paid product to ensure that the FTC guidelines are adhered to. Truth in Advertising says it can be difficult for young children to distinguish between what it calls “advergames” — games that are created to promote specific brands or products — and regular user-made games. This report gives an example of what searching for is like. Stranger ThingsIt is unclear from the results of the Google search whether there are paid Netflix and fan-made games.

According to the Roblox community guidelines, developers who place advertisements in their games “remain responsible for all advertising content,” and must follow the “Community Rules, the Terms of Use and all other Roblox rules.”

Roblox Corp. responded to Polygon’s request for comments on the matter:

Roblox is dedicated to providing a safe and positive experience for developers as well our users. Developers who want to use or promote ads in their experience must follow our strict guidelines. We also have specific rules for users aged 13 and under. All developers are required to adhere to the Community Standards that we enforce. There is no tolerance for fraud. Our policies and processes are designed to combat content that exploits or tricks users. Additionally, we invest heavily in innovative ways that allow creators to get compensated while making sure that ad experiences comply with all applicable laws.

Truth in Advertising’s 44-page complaint goes on to mention specific instances of misleading marketing practices that can occur in Roblox. Real-life Roblox players can serve as ambassadors and engage with Roblox users through Roblox games. The complaint lists Nike influencers who spend time on Roblox and “buy” Nike gear and talk to people playing the Nike game, but aren’t “disclosed in the material connection to Nike” within Roblox.

In addition, Truth in Advertising’s report takes issue with “undisclosed” or unmarked Roblox avatars that engage in promotional activities, such as giving or selling in-game items. It could be applicable to all unmarked NPCs that sell in-game content. However, the report highlights that celebrities-inspired avatars have been used as promotional tools.

“Wherever endorsements 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, whatever their age may be, know that what they are viewing or interacting with is an endorsement,” Truth in Advertising said. “And despite the transitory nature of avatar influencers participating as walking, talking endorsements within the Roblox metaverse, no brand (including Roblox) is permitted to ignore its legal obligation to disclose these endorsements.”