The Federal Trade Commission hosted an event October 19, 2022, discussing digital advertising to kids. The event primarily focused on “blurred” or “stealth” advertising. Blurred advertising refers to ads that are difficult to distinguish from substantive content.
One example of this type of advertising would be an ad that appears to be part of the game play in a mobile application. Panelists at the event also emphasized the difficulty, for kids and adults alike, in distinguishing between paid or sponsored influencer content and genuine product reviews shown in other contexts.
In her opening remarks, FTC Chair Lina Khan said the FTC is particularly concerned that, where kids cannot distinguish advertisements from organic content, they may be prompted to make privacy choices and provide personal information without understanding the risks of doing so. She also emphasized the risks of children being exposed to harmful or adult content when they view or interact with advertising.
Throughout the event, panelists and moderators debated the role of regulations in the digital advertising space. The ability for advertisers to target small groups of users, and the complexity of child cognitive development, present practical difficulties to regulatory enforcement in this space. Further, advertising is protected speech under the First Amendment.
Despite the difficulties around regulatory enforcement, the FTC may bring enforcement actions against companies for unfair and deceptive trade practices. If the FTC were to consider blurred and stealth advertising as deceptive, we may see enforcement actions against companies advertising to children or in child-directed services, particularly where such advertising prompts children to take actions that may not be in their best interests.
Panelists emphasized the role of self-regulatory organizations in promoting the interests of children. For example, Mamie Kresses of Children’s Advertising Review Unit (CARU) presented examples of blurred advertising and shared some of CARU’s guidelines for advertising to children. CARU’s enforcement capabilities are limited to children under 13, however, leaving an enforcement gap for teens.
Other panelists promoted the need for more media literacy education for kids and parents. Children often lack the ability to think critically about advertisements or may not understand that advertisements have a persuasive intent even when children are aware they are seeing an advertisement.
You can find the transcript of the event on the event webpage, and the FTC is seeking comments regarding stealth advertising until November 18, 2022.
Charlotte Lunday is a Senior Associate at Hintze Law with expertise in COPPA, FERPA, and online safety.
Hintze Law PLLC is a Chambers-ranked, boutique privacy firm that provides counseling exclusively on global data protection. Its attorneys and privacy analysts support technology, ecommerce, advertising, media, retail, healthcare, and mobile companies, organizations, and industry associations in all aspects of privacy and data security.