ADventures in Law

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We are not quite at the <em>Matrix</em> moment of a red pill/blue pill choice yet, but we are moving closer every day to the possibility of a fully immersive virtual world. And the regulators and watchdogs are already thinking about how we can protect the kids when they venture not outside in the real world but inside to the parallel online metaverse. On Aug. 23, the BBB National Programs’ Children’s Advertising Review Unit (<a href="https://bbbprograms.org/programs/all-programs/children's-advertising-review-unit/Ad-Guidelines">CARU</a>), the self-reg watchdog responsible for monitoring ads directed to people U13, issued a new <a href="https://assets.bbbprograms.org/docs/default-source/caru/compliancewarning-metaverse.pdf?sfvrsn=b9937f2b_7&amp;_ga=2.177442086.266578981.1661341212-790529479.1661341212&amp;_gl=1*1mxnq7n*_ga*NzkwNTI5NDc5LjE2NjEzNDEyMTI.*_ga_FXP6NWPNYM*MTY2MTM0MTIxMi4xLjEuMTY2MTM0MTM5Ni4wLjAuMA..">compliance warning</a> for advertising practices directed to children in the metaverse. Vice President of CARU Mamie Kresses explained that this warning “puts advertisers, brands, influencers and endorsers, developers, and others on notice that CARU’s Advertising Guidelines apply to advertising in the metaverse and that BBB National Programs’ CARU will strictly enforce its Guidelines against metaverse advertising.”

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Defining what we mean by “metaverse” is important. In the future, when technology allows, we may live and work and learn in the metaverse just as we do in the real world. (Dropping kids or pets in the metaverse to be virtually babysat safely sounds like a utopian dream!) It may be easiest to speak by way of analogy, and we will try with movies. The future metaverse could look a little something like <a href="https://www.imdb.com/title/tt0910970/">Wall-E</a> or <a href="https://www.imdb.com/title/tt1677720/?ref_=fn_al_tt_1">Ready Player One</a> or maybe even the <a href="https://www.imdb.com/title/tt0133093/?ref_=fn_al_tt_1">Matrix</a>. <a href="https://www.imdb.com/title/tt6264654/?ref_=fn_al_tt_1">Free Guy</a> shows the gaming metaverse as it is now and a glimpse of what it might become (if machines can feel and looked like Ryan Reynolds). The metaverse today is just getting started but is largely experienced in the world of interactive multiplayer games such as Fortnite and/or involving AR/VR technology for a more realistic, immersive 3D experience. A fun video of the current metaverse can be enjoyed <a href="https://www.youtube.com/watch?v=rtLTZUaMSDQ">here</a>.

Back to CARU! We are not really sure we needed this metaverse warning, as CARU has never stuttered that its Guidelines apply to all forms of advertising to U13. In the <a href="https://bbbprograms.org/media-center/newsroom/CARU-revised-guidelines-for-advertising-to-children">last update to the Guidelines</a>, CARU tinkered with the language to make its jurisdiction even clearer for digital media and gaming and close up potential loopholes relating to third-party advertising. How the Guidelines will apply in the future to the developing metaverse is hard to know exactly, but CARU has put down a marker that it will be there. And we don’t doubt it. After all, CARU has looked at in-app advertising, child influencer advertising and social media advertising over the years.

This warning from CARU provides four points to be mindful of when advertising to children in the metaverse. Unsurprisingly, CARU highlights the need for businesses to avoid blurring advertising and nonadvertising content in the metaverse. Children often struggle to differentiate between advertising and nonadvertising content, which is all the more difficult in the virtual world when we do not have clearly announced commercial breaks and when the experiences are not linear. To accomplish this deblurring of advertising content, CARU recommends a variety of approaches such as disclosures and contextual cues to help children determine what is and is not branded content.

Keeping with the topic of interwoven advertising and nonadvertising content, CARU highlighted as the second topic of concern the use of influencers and endorser advertising in the metaverse. CARU explains that both advertisers and influencers are responsible for the claims being made and the accompanying clear and conspicuous disclosures that identify the material relationship between the influencer and advertiser.

Third, CARU discusses manipulative tactics and disclosures. Due to the susceptibility of the target population, CARU is particularly concerned with the use of manipulative tactics (or the fashionable term “dark patterns”). In the compliance warning, CARU highlights deceptive door openers, social pressure and validation as tactics that could be particularly concerning in the metaverse. This idea of social pressure on children in advertising is not a new concept, as CARU has a long history of actions against advertisers for playing on the emotions of children.

Finally, the need for clear and conspicuous disclosures was highlighted as an area of particular concern for CARU in the metaverse. To be compliant with CARU’s Guidelines, a disclosure should be understandable to children considering their limited vocabularies and language skills.

This warning comes on the heels of complaints filed by TinA to the FTC encouraging government intervention. It makes good sense that the FTC does not jump in to act without fully assessing the landscape, lest it inadvertently deter innovation. The FTC proceeded in this way when looking at <a href="https://www.ftc.gov/workshops/2013-workshops">native advertising</a>, through a thoughtful, measured approach starting with a workshop and culminating in a <a href="https://www.ftc.gov/system/files/documents/public_statements/896923/151222deceptiveenforcement.pdf">new policy</a> and <a href="https://www.ftc.gov/business-guidance/resources/native-advertising-guide-businesses">guidelines</a> on deceptively formatted ads. The FTC is <a href="https://www.ftc.gov/news-events/events/2022/10/protecting-kids-stealth-advertising-digital-media">hosting a similar event</a> on Oct. 19 on how to protect kids from unclear advertising in digital media, including the metaverse. (For reasons that escape us, these public information-gathering exercises are no longer called “workshops” but now “events.” We sort of prefer “soiree” or “gala” or “kiki,” but we were not consulted.)

But before formal regulatory guidance, it is exactly the job of self-regulation to step in and start providing advice. As we enter this brave new world of technology, we will look to CARU for guidance and leadership. We do hope more specific guidance and further suggestions will come in the form of public statements such as the compliance warning rather than via a rush to bring cases. It takes a village to raise kids, and it will take a village to fully appreciate how to responsibly advertise to people of all ages and to level up our metaverse compliance efforts.

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