Advertising watchdog the Children’s Advertising Review Unit (CARU) has found Roblox in violation of guidelines that require social media creators to disclose material connections to companies they promote, the latest in a string of rulings taking aim at the game platform’s ad policies.
In a report released on Friday, CARU determined that creators earning commissions and promotion through the Roblox Video Stars Program “did not clearly and conspicuously disclose their material connection to Roblox in their videos in a way children can understand.”
While some creators meet these standards, CARU said many do not disclose that they’re paid through an affiliate program when their audiences — a large proportion of which sit within the f 9 to 12-year-old age range — purchase in-game currency Robux. CARU also stated that Roblox does not provide creators with adequate guidance and tools to make disclosures.
While Roblox does have an “Influencer Monitoring Program” that requires employees to periodically and randomly check creator posts to ensure compliance with platform rules, policies and Federal Trade Commission endorsement guidelines, CARU found that the program doesn’t “specifically address how to make adequate disclosures to children.”
CARU recommended that Roblox ramp up monitoring efforts and modify its Video Stars Program to provide creators with more guidance and examples of how to clearly disclose material connections to children.
In a statement to advertisers referenced in CARU’s report, Roblox 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.” Roblox also noted that many creators don’t target children as their primary audience.
Roblox has previously stated that around half of its 58.8 million daily active users are under 13 years of age.
“We are disappointed with the CARU decision and attempts to correct factual inaccuracies were not considered,” a Roblox spokesperson said in a statement sent to Campaign US. “Roblox has robust policies and procedures that far exceed its legal obligations in order to create a safe environment for all users.”
In March, Roblox announced that it will ban all advertising aimed at children under 13 starting on June 15 after consumer advocacy group Truth in Advertising designated an in-game Walmart ad as “stealth marketing” for failing to delineate between advertising and organic content.
Roblox defines advertising as any in-game content designed to promote products or services outside of the game and will require developers to identify and label ads to users in virtual worlds.
As part of its review, CARU also noted that Roblox doesn’t adequately label in-game ads to children nor disclose what video content is part of an ad, but noted that once the game’s new ad policy kicks into effect next month, these concerns “will no longer be at issue.”
In its report, CARU also said it is working with Roblox to align the game company’s privacy practices with its own guidelines and with the Children's Online Privacy Protection Act.
Roblox posted $655 million in revenue in its Q1 earnings but didn’t break out how much of its revenue was accumulated from ad spend versus other revenue streams such as its cut of in-game purchases.