Apps for children -- advertising space in sheep's clothing?

28 August 2015 | Linda-Jane Vanhear, Frankel Lawyers

Key points for lawyers

• Clients are advised to clearly disclose any product endorsements or business relationships for both in-app advertisements as well branded in-app content. If the advertisement targets children under five years of age, it is advisable that such disclosure is communicated both orally and in writing.
• If your client is an app developer of children's apps, lawyers may like to suggest that clients consider whether adequate parental controls exist within the functionality of the app. Clients may also be advised to have the app reviewed by child advocacy organisations before its release.
• Clients creating commercial children's content for apps must ensure that products are fairly and accurately represented in a manner that is clearly understood by children.
• Collaboration between advertising providers, app developers and mobile platforms may be encouraged in order to develop advertising policies and pre-approval processes which can effectively monitor the content appropriateness of in-app advertisements for apps targeted specifically to children.

In corollary to the growth in children's access to the internet and touchscreen tablet computers and smartphones, demand for the development of child-friendly application software, commonly known as "Apps", has surged. According to leading market research company Nielsen in their 2014 Australian Online Landscape Review, three out of five Australian households with primary school age children own a tablet computer and have an internet connected television in the home.

Moreover, research reveals that in contrast to adults, children are more likely to access content via an App. Correspondingly, YouTube's overall viewing time of content grew by 50% in 2014, citing a notable 200% rise for "family entertainment" content. With internet and mobile device penetration experiencing steady year-on-year growth, Apps have increasingly become an ideal platform for marketers and advertisers to reach the highly covetable demographic of children aged between 2 to 8 years.

It has long been accepted by behavioral and social science research that children, especially children under 5 years of age, lack the cognitive capacity to identify and understand advertising material as distinct from programming content. Studies indicate that it is only between the ages of 6 to 11 years that children begin to develop the ability to think skeptically about advertising; nevertheless they may still not be able to respond critically to advertisers' intent to sell products. This renders children uniquely vulnerable to commercial influence, arguably warranting the institution of various legislative and self-regulatory measures to restrict children's exposure to advertising.

With this milieu in mind, the development of Apps targeted at children, the majority of which are richly and subversively integrated with commercial promotion, presents various legal issues relating to consumer protection.

While Australia's legislation and regulations address children's advertising with respect to broadcasting content, the application of consumer legislation and industry regulations to emerging technologies such as mobile apps is not so well-defined.

While Australian regulatory authorities have not yet applied Australian Consumer Law to in-app advertising and branded editorial content in a digital environment, partly because online companies have been slow to target young children with in-app advertising, advertisers, agencies and app-developers should be acutely aware of particular nuances of in-app advertising targeted at children which may open them to greater liability under Australian Consumer Law.

Note: Extract from Internet Law Bulletin August 2015, Volume 18 No 5