Regulators in the U.S., the U.K. and the EU have each recently called for a crackdown on digital ads targeting kids, blaming big tech for not doing enough to prevent young people from seeing ads and other marketing messages promoting things ranging from sugary, high-calorie foods to pop-ups that encourage them to make in-game purchases.
But what about the metaverse, which will be a wide-open world in which players can take their avatars anywhere and see anything, ranging from virtual stores and entertainment venues to minigames and just flat-out digital billboards and videos? To say nothing of branded digital goods like clothing for avatars.
See also: What’s a Metaverse, and Why is One Having a Fashion Show?
Then there are nonfungible tokens (NFTs) that can hold images, video and music. They can and are being used as access keys to events like concerts, venues and game sites, as well as receipts or vouchers for both digital and real-life goods — for example, a free fast-food cheeseburger via a QR code (which can also be held on a regular cryptocurrency token). Even if marketers only hand them out to adults, these tokens would likely be available in secondary resale markets.
See also: QR Codes’ Growing Popularity Extends to Crypto Payments
It’s an issue that the Better Business Bureau took up aggressively in August, issuing a compliance warning through its Children’s Advertising Review Unit (CARU), which focuses on children under age 13.
The warning notice is intended to put “advertisers, brands, influencers and endorsers, developers, and others on notice that CARU’s Advertising Guidelines apply to advertising in the metaverse and that [it] will strictly enforce its guidelines against metaverse advertising,” said Mamie Kresses, vice president of CARU.
Online areas of particular concern to CARU include:
The group also warned about collecting personal information about children.
More than Ever
Advertising targeting children is not a low-profile issue. In his March 1 State of the Union speech this year, President Joe Biden said, “It’s time to strengthen privacy protections, ban targeted advertising to children, demand tech companies stop collecting personal data on our children.”
In the U.K. rules prohibiting ads for foods high in salt, sugar and fat before 9 p.m. on TV are matched by prohibitions for social media sites like Facebook, Instagram and Twitter and will go into effect next year. And the EU banned online ads targeting children in its Digital Services Act, the World Economic Forum noted. The legislation passed in July.
But while it will be difficult enough to comply with and enforce in centralized metaverses like Roblox, Fortnite, Second Life and Meta’s Horizon Worlds which can require identifying information to use, the rules will be harder to enforce in blockchain-based metaverses such as Decentraland and Sandbox, and a growing number of competitors.
Decentralized Difficulties
While those are essentially centralized at this point, their goal is to become fully decentralized and DAO controlled, although regulators are fighting that goal with increasing effectiveness.
Read more: CFTC Lawsuit Aims to Rein in DeFi
Keeping children away from inappropriate content will be more difficult without collecting know-your-customer (KYC) data from anyone entering a decentralized metaverse. One technique would be focusing on wallets holding the native cryptocurrencies (like Decentraland’s MANA) most metaverses require be used for all in-world purchases, but that’s still difficult to enforce on pseudonymous blockchains.
One technique already being tried in centralized metaverses is individual firms’ actively blocking participation — Roblox is rolling out features that will block children from interacting with certain content, AdNews reported in September. And even decentralized metaverses will likely permit content producers to block children using the same technology that allows them to charge entrance fees.
But how well decentralized a metaverse can — and be willing to — provide gatekeeping remains to be seen.
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