The YouTube Kids app was released in late February on the iTunes and Android stores. It's designed to let kids watch "family friendly" videos on smartphones and tablets.

Google has claimed that it only shows kid-appropriate ads that undergo a rigorous screening process. Many types of ads are banned on the app, including ads for food, beverages, video games, and beauty and fitness products.

But the consumer groups say many of the app's videos violate Google's own stated policies.

"Many of the video segments endorsing toys, candy and other products that appear to be 'user-generated' have undisclosed relationships with product manufacturers in violation of the FTC's guidelines concerning the use of endorsements and testimonials in advertising," said the letter than the groups sent to the FTC on Tuesday.