The Federal Trade Commission is investigating Reddit’s deals to sell user data for AI training purposes, according to a regulatory filing. Reddit inked in February to allow the search giant to use Reddit’s data to train its AI models. The deal has evidently raised concerns among regulators, prompting the FTC to send a letter of inquire to the
Social Media platform. Reddit revealed the letter in with the SEC: On March 14, 2024, we received a letter from the Federal Trade Commission (the “FTC”) advising us that the FTC’s staff is conducting a non-public inquiry focused on our sale, licensing, or sharing of user-generated content with third parties to train AI models. Given the novel nature of these technologies and commercial arrangements, we are not surprised that the FTC has expressed interest in this area. We do not believe that we have engaged in any unfair or deceptive trade practice. The letter indicated that the FTC staff was interested in meeting with us to learn more about our plans and that the FTC intended to request information and documents from us as its inquiry continues. Regulatory engagements can be lengthy and unpredictable. Any regulatory engagement may cause us to incur substantial costs, and it is possible for any regulatory engagement to result in reputational harm or fines, cause us to discontinue or modify our products, services, features, or functionalities, require us to change our policies or practices, divert management and other resources from our business, or otherwise adversely impact our business, results of operations, financial condition, and prospects. It is unclear at this time if Reddit is being specifically targeted by the FTC or if the agency is targeting other platforms that have struck similar deals.