Invisible Advertising to Children in Gaming Ecosystems: Legal Regulation of Embedded AI Marketing

Abstract

Today, the gaming industry has become a highly complex context, one that unfolds smart marketing systems based on artificial intelligence that go beyond classic advertising formulae, targeting children through affective, personalized and behavioral means. This paper explores the legal and regulatory hurdles embedded AI marketing would face in children's gaming environments, questioning the sufficiency of consumer protection law, data privacy regimes and advertising standards regimes in the key jurisdictions of the European Union, the United States, the United Kingdom, and India. The paper discusses existing legal instruments, drawing on the theories of epistemic asymmetries and persuasive architectures as well as from the literature on developmental psychology, and points to their structural limitations in governance of AI-driven advertising in games. The paper identifies four critical gaps in regulation: the lack, in the definitions of what constitutes an ‘advertisement’ in immersive environment; lack of disclosure obligations over non-linear ad streams generated by artificial intelligence; lack of algorithmic accountability standards for children; and lack of international regulation coordination in the context of transnational platform governance. It suggests a multi-level regulatory framework, including a principle of 'best interests of the child', an enforceable Algorithm Impact Assessment and a ban on the use of persuasion architectures on under-18s.