WATCH: Disney, Nestle Pull YouTube Ads After This Viral Video Exposing ‘Pedophilia Ring’

According to Bloomberg, the Walt Disney Co., Nestle, and "Fortnite" creator Epic Games, Inc. have "paused" their advertising spending on YouTube after a viral video report detailing an alleged "soft-core pedophilia ring" operating via the platform's comments section.

An alarming 20-minute report (below) posted by video blogger Matt Watson on his YouTube channel "MattsWhatItIs" Sunday purports to expose "a wormhole into a soft-core pedophilia ring on YouTube."

"Over the past 48 hours I have discovered a wormhole into a soft-core pedophilia ring on Youtube," Watson wrote in the description of the video, which has already racked up nearly 2 million views. "Youtube’s recommended algorithm is facilitating pedophiles’ ability to connect with each-other, trade contact info, and link to actual CP in the comments. I can consistently get access to it from vanilla, never-before-used Youtube accounts via innocuous videos in less than ten minutes, in sometimes less than five clicks. Additionally, I have video evidence that these videos are being monetized by Youtube, brands like McDonald’s, Lysol, Disney, Reese’s, and more."

In his report, Watson demonstrates in real-time how users can use the comment section on YouTube to identify sexually suggestive videos involving young girls. YouTube's algorithm, Watson shows, will then begin recommending similar videos.

"This loophole is wrong, something needs to be done," Watson says in the video's description. "It's being monetized. CP is being traded as well as social media and WhatsApp addresses. Youtube is facilitating this problem. It doesn't matter that they flag videos and turn off the comments, these videos are still being monetized, and more importantly they are still available for users to watch."

On Wednesday, Bloomberg reported that Disney joined a growing number of companies, including Nestle and Epic Games, Inc., in postponing their advertising out of concern about the report.

"All Nestle companies in the U.S. have paused advertising on YouTube, a spokeswoman for the company said Wednesday in an email," Bloomberg reports. "Video game maker Epic Games Inc. and German packaged food giant Dr. August Oetker KG also said they had postponed YouTube spending after their ads were shown to play before the videos. Disney has also withheld its spending, according to people with knowledge of the matter, who asked not to be identified because the decision hasn’t been made public."

In response to the deeply troubling report, a spokesperson for YouTube told Bloomberg in an email: "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."

Bloomberg also notes that YouTube announced an update to its "strikes system" Tuesday for handling users who post inappropriate content.

Here's Watson's report (warning: disturbing content, some language):