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

Advertising in the metaverse is tricky.

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 full complaint names several major U.S.-based corporations, 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 that primarily caters to children. Roblox Corp. refers to many of its games as “experiences” and they are created by the users, not the company. However, over the past several years, more and more big-name companies have begun using Roblox games to advertise their products. Hasbro released a Nerf Gun shooter; Mattel released an open-world Hot Wheels game; and more recently, Sega of America partnered with a company to release a Sonic the Hedgehog game on the platform. Truth in Advertising claims that Roblox is using advertising to trick millions of users. This happens because the company “has failed to set up any effective guardrails” to comply with Truth in Advertising laws on their platform .”

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The report goes into great depth to describe and list various problems with advertising practices on Roblox, but a lot of what it comes down to is unmarked or undisclosed advertising in different forms. (Disclosed advertising, for instance, is when an influencer uses #ad on TikTok, which that platform requires users to include if the post is a paid promotion so that they abide by FTC guidelines.) Truth in Advertising states that it is difficult for children under the age of 10 to differentiate between “advergames”, which are games created by brands and products, and user-made games. The report lists an example of searching for Stranger Things, with the search results being unclear as to the difference between the paid Netflix game and fan-made ones.

According to Roblox’s community guidelines, advertisers who are placed in Roblox games must “remain responsible” for any advertising content and follow “Community Rules and the Terms of Use.”

Reached for comment about 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 that want to promote or use ads within their experiences, including specific rules to protect users under 13, expectations that all developers adhere to Community Standards we strictly enforce, and no tolerance for fraud or scams. Our policies and processes are designed to combat content that exploits or tricks users. In order to compensate creators for their work, we make substantial investments in innovative ways. We ensure 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. There are players that interact with Roblox users and serve as ambassadors for brands on the platform. 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. The report points out celebrity-inspired avatars such as LeBron James have been used for promotional exchanges.

” Advertisers must ensure the legal compliance of any endorsements. This includes the content, disclosure, and form used by influencers. Truth in Advertising stated that even in the metaverse companies have legal responsibility for making sure that all consumers know what they’re viewing and interacting with. “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.”