A top YouTube toy reviewer is facing accusations of misleading preschoolers into watching ads by not disclosing sponsorship deals.
Ryan ToysReview — one of the most popular YouTube channels, with billions of views and more than 21 million subscribers — features an excitable 7-year-old named Ryan unboxing toys and playing with them and going on kid-friendly adventures. The channel, run by Ryan's parents, Shion and Loann Kaji, was YouTube's top earner in 2018, according to Forbes, bringing in $22 million.
But a watchdog group alleges Ryan ToysReview has raked in its profits under "deceptive native advertising" through product placement that youngsters are not able to discern as a sales pitch — a violation of Federal Trade Commission law.
In a complaint filed to the FTC dated Aug. 28, Truth in Advertising accuses the channel of deceptively promoting "a multitude of products to millions of preschool-aged children."
The target audience for the videos is children under 5 years old, "a particularly vulnerable class" who are not yet able to distinguish between commercials and other content, Truth in Advertising adds.
The channel, which has endorsements with a variety of companies, including Hardee's, Colgate and Chuck E. Cheese, does not always disclose that its content is sponsored, Truth in Advertising wrote, and if it does, the disclosures are often "inadequate" — mentioned in voiceovers that last for less than two seconds or flash in text on the screen that many in Ryan ToysReview's audience are too young to read.
"The preschool audience is unable to understand or even identify the difference between marketing material and organic content, even when there is a verbal indicator that attempts to identify the marketing content," the complaint states.
"Such deceptive ad campaigns are rampant on Ryan ToysReview and are deceiving millions of young children on a daily basis."
"Such deceptive ad campaigns are rampant on Ryan ToysReview and are deceiving millions of young children on a daily basis," it adds.
Ryan's father said that the family's channel adheres to YouTube's rules and that the well being of their viewers is "always our top priority."
“We strictly follow all platforms’ terms of service and all existing laws and regulations, including advertising disclosure requirements. As the streaming space continues to quickly grow and evolve, we support efforts by lawmakers, industry representatives and regulators such as the FTC to continuously evaluate and update existing guidelines and lay new ground rules to protect both viewers and creators,” Shion Kaji said in a statement.
The accusations against the toy reviewer come as YouTube has struggled to prove it is doing enough to protect its youngest users.
Earlier this month, Google, the parent company of YouTube, agreed to pay a record $170 million fine to settle claims over child privacy violations after regulators said the video site illegally collected personal information from children without their parents' consent, then used that information to target them with ads.
In addition to paying the fine, YouTube agreed to implement a system that would require its video channel creators to identify whether their content was geared at children so targeted ads would not appear in those videos.
Some criticized the settlement as not being harsh enough, including Federal Trade Commissioner Rohit Chopra.
“The company baited children using nursery rhymes, cartoons and other kid-directed content on curated YouTube channels to feed its massively profitable behavioral advertising business,” he said in a statement at the time.