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takyon writes:

Google's YouTube Kids application has come under fire from advocates who argue that the platform exposes kids to deceptive advertising practices disguised as entertainment. The YouTube Kids app was announced in February, and was designed to include an easy-to-use interface, content filtering, and parental controls.

"YouTube Kids is the most hyper-commercialized media environment for children I have ever seen," commented Dale Kunkel, a professor of communication at University of Arizona. "Many of these advertising tactics are considered illegal on television, and it's sad to see Google trying to get away with using them in digital media."

[...] "There is nothing 'child friendly' about an app that obliterates long-standing principles designed to protect kids from commercialism. YouTube Kids exploits children's developmental vulnerabilities by delivering a steady stream of advertising that masquerades as programming," said Josh Golin, director of the Campaign for a Commercial-Free Childhood.

The complaint [PDF] was written by The Center for Digital Democracy (CDD), Campaign for a Commercial Free Childhood (CCFC), American Academy of Child and Adolescent Psychiatry, Center for Science in the Public Interest, Children Now, Consumer Federation of America, Consumer Watchdog, and Public Citizen. It alleges that the intermixing of advertising and entertainment, the proliferation of undisclosed product endorsements, and lackluster screening of ads by YouTube's policy team all violate Section 5 of the FTC Act.

The campaigners cite "unboxing videos" as a particular concern. In one example:

This 7:41 segment is essentially a 7-minute long commercial for McDonald's. The entire segment is filmed in a play scene of McDonald's where dolls from Disney's Frozen movies enjoy toy versions of McDonald's products. According to the person in the video, "We are at McDonald's with Elsa and Ana... Ana is having her favorite ice cream sundae and Elsa is having a Sprite."