U.S FTC Investigates Reddit’s Data Licensing Policies Amid IPO Preparations

• Reddit has regulatory challenges due to the increasing usage and popularity of AI.
• In February, Reddit and Google reached an annual deal worth $60 million.

A U.S Federal Trade Commission (FTC) investigation into Reddit’s data licensing policies for AI training has begun. In the midst of getting ready for its highly anticipated initial public offering (IPO), the firm is being investigated.

A revised Form S-1 registration statement was filed with the U.S. SEC by Reddit on March 15, 2024, the day after the platform received notification of the FTC probe. This statement disclosed the investigation.

Regulatory Challenges Due to AI Link

Because these technology and commercial arrangements are so novel, Reddit said in its submission that it is unsurprised by the FTC’s interest. Nonetheless, Reddit maintained that it had not participated in any misleading or unfair business practices. Reddit has regulatory challenges due to the increasing usage and popularity of AI, which are highlighted by the FTC’s investigation.

In February, Reddit and Google reached an annual deal worth $60 million, which would enable Google to capitalize on Reddit’s massive user data for artificial intelligence training. Reddit will get more visibility on Google’s platform in exchange for its important data, which will enhance relations between the two companies.

Privacy activists and authorities are concerned about the use of user data for artificial intelligence. The filing by Reddit acknowledged that the company’s data licensing efforts are in their early stages and might be evolved by forthcoming legislation.

In the past, people have taken notice of Reddit’s AI ambitions. Moreover, the firm revealed its Bitcoin and Ether holdings as part of its financial strategy during the IPO preparations. The filing also revealed that Reddit has purchased Polygon MATIC and Ether to facilitate virtual transactions on its platform.

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