Nestle and others have suspended YouTube ads over news of a pedophile network on the site

  • Disney, Nestle and "Fortnite" maker Epic Games have paused advertising on YouTube.
  • Advertisers including Peloton and Grammarly are urging YouTube to resolve the latest content challenge.
  • The move is a familiar black eye for Google-owned YouTube, which frequently battles content moderation challenges and is losing market share of the digital advertising industry.
Susan Wojcicki
Michael Newberg | CNBC
Susan Wojcicki

Disney, Nestle and "Fortnite" maker Epic Games have paused advertising on YouTube after reports of a pedophile network rampant in the comments of monetized videos, according to Bloomberg and spokespeople for the companies.

The controversy stems from reports that pedophiles have latched onto videos of young children, often girls, marking time stamps that show child nudity and objectifying the children in YouTube's comments section. The move is a familiar black eye for Google-owned YouTube, which frequently battles content moderation challenges and is losing market share of the digital advertising industry. The platform has come under fire before for selling ads against offensive and extremist content.

A Nestle spokesperson confirmed, "All Nestl companies in the U.S. have paused advertising on YouTube."

"We have paused all pre-roll advertising," said a spokesperson from Epic. "Through our advertising agency, we have reached out to Google/YouTube to determine actions they'll take to eliminate this type of content from their service."

Disney did not immediately return requests for comment.

Advertisers like Peloton and Grammarly issued strong statements urging YouTube to resolve the latest content challenge.

YouTube declined to comment on any specific advertisers, but said in a statement, "Any content — including comments — that endangers minors is abhorrent and we have clear policies prohibiting this on YouTube. We took immediate action by deleting accounts and channels, reporting illegal activity to authorities and disabling violative comments."

WATCH: YouTube's top earners made $180.5 million in 2018.