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Study Shows Deceptive Ads Directed to Children; Advocacy Groups Push for FTC Sanctions; CARU Remains Active in the Space


A number of child advocacy groups are worried after the release of a research study suggesting that popular apps for children in the iOS and Android systems feature advertisements that prompt and encourage young children to ma
ke in-app purchases, collect their personal data, and distract them from the in-game experience.

The study, titled “Advertising in Young Children’s Apps: A Content Analysis”, was written by a group of researchers headed by Jenny Radesky, who is a behavioral pediatrician at the University of Michigan Medical School. The research looked at 135 children’s apps including those in the “Ages 5 and Under” category, both paid and free and both from the Android and iOS app. The study found that in the sample, 88% of paid children’s apps and all of free children’s apps had advertisements, which varied in form and effect towards children.

The study noted various ways that advertisements were deceptive. The study noted that some advertisements were designed to look like a part of the game but were actually “camouflaged ads”. Other advertisements entice children to make in-app purchases, some even showing distressing images like children crying so that young players will make purchases. Other advertisements had mini-games that children could not play unless they watch an ad, or get bonuses when they watch an ad. These ads, as Radesky pointed out, can take advantage of children who do not yet have the “critical thinking skills to understand the ‘persuasive intent’ of an advertisement”, so they can get profit via clicks.

Josh Golin, the executive director of the Campaign for a Commercial-Free Childhood, mentioned in a BuzzFeed News report, hopes that “the FTC will fine the app developers and fine them enough that it sends a clear message to the preschool app industry.”

Prohibitions on product placement and instances where a character encourages children to make purchases only apply to television at present, and do not apply to the internet. However, CARU has had several cases that cover the exact issues of concern in the University of Michigan study.

Specifically, in CARU’s Barbie Sparkle Blast case (#6112), CARU determined that the app did not clearly and conspicuously disclose where there was advertising. In between levels during gameplay, video advertisements that popped up had to be watched in their entirety before players were able to move on. Users could also choose to watch videos to earn free virtual currency to purchase virtual items. Neither of these advertisements disclosed that they were advertising. Therefore, CARU recommended that the operator include adequate disclosures on all ads, which the operator immediately implemented. Similarly, CARU has held that online games or activities that feature products must use prominent disclosures to make the advertising nature of the game known (Dum-Dums #5258, Kellogg’s Froot Loops #5493).

The study also referenced an app that showed kids crying if they did not click on an in-app purchase. CARU had a similar case that covered this precise issue. In CARU’s Mall Girl App inquiry (#5594), there was a message to kids that stated “Your pet is going to be taken away by the SPCA for animal neglect! Pay a fine to keep your pet.” If the player did not have enough virtual currency, a player could purchase virtual cash with real money. Indeed, because of the game structure, users effectively had no choice but to make a purchase because it was nearly impossible to have enough currency otherwise. CARU determined that the app created a sense of urgency to save the player’s virtual pet and recommended that the operator discontinue this message, which it did. CARU’s FooPets.com case (#5314) covered similarly misleading advertising practices and sales pressure issues. In this case, the advertiser did not disclose that users had to become paid members to access certain gameplay features. The app also used extremely persuasive language to try and convince kids to join the service.

The report also mentioned banner ads that were inappropriate for kids, the researchers said. CARU’s guidelines specifically prohibit this practice, disallowing advertisers from portraying inappropriate behavior/content or from knowingly linking to pages that portray such behavior or material (CARU Guidelines Section (i)(2)(b).

Finally, it is worth mentioning that CARU actually had a case with one of the app developers investigated in the study, Outfit7, the creator of the Talking Tom Cat apps. CARU cited the company with similar violations that were mentioned in the study, namely that the app did not adequately disclose that advertising was in fact advertising. When such an instance of noncompliance occurs, CARU has the power to open a compliance investigation and request that the advertiser report on the advertising at issue and explain its practices. If the advertiser does not respond or show that it has made a reasonable attempt to comply, CARU shall refer the file to the appropriate government agency.

CARU does valuable work and is doing its best to help address these issues. And we can always use your help! CARU accepts consumer complaints. Consumers are on the front lines and CARU welcomes anonymous submission of any issues consumers encounter. We check these regularly and follow through on all of these.

If you have any questions about advertising practices, please don't hesitate to reach out to CARU at info@caru.bbb.org.

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