The US Federal Trade Commission is currently investigating the licensing deals that Reddit has made with various parties, including Google, allowing them to use content on the platform for training AI models.
Reddit disclosed in their IPO prospectus that they received a letter from the FTC on March 14, informing them of the investigation into the sale and licensing of user content for AI training purposes. The company did not reveal the reasons behind the investigation but stated that it believes it has not engaged in any unfair or deceptive practices.
Reddit also mentioned that the FTC has requested an interview and plans to gather documents and information as part of the investigation. The company cautioned potential shareholders about the potential costs and risks associated with the investigation, including the possibility of having to alter or cancel certain plans.
Earlier this year, it was reported that Reddit had entered into a deal with Google to provide content for AI training, with the agreement reportedly worth over 55.5 million euros annually. The platform is also said to have similar agreements with other smaller parties, although details are scarce.
Despite the investigation, Reddit expressed confidence in its data licensing business, stating in the prospectus that it is a new venture that aligns with their values and the rights of users. The company is set to go public later this month, and the outcome of the investigation could impact its future plans and operations.
English (US)