In a recent regulatory filing, Reddit disclosed receiving a letter from the US Federal Trade Commission (FTC) on Thursday inquiring about its practices related to user-generated content shared with third parties for AI model training.
The FTC, the primary US antitrust regulator, possesses the authority to penalize companies found engaging in unfair or deceptive trade practices. The concept of licensing user-generated content for AI endeavours has raised inquiries from lawmakers and rights groups regarding privacy, fairness, and copyright concerns.
Reddit is not alone in exploring data licensing for AI purposes. Other platforms like Stack Overflow, the Associated Press, and Tumblr owner Automattic have entered into similar arrangements. None of these licensors have immediately commented on the matter. Additionally, Reddit is not the sole recipient of an FTC letter concerning data licensing, according to Axios.
While Reddit maintains it has not engaged in unfair or deceptive practices, it acknowledges the potential cost and time implications of dealing with a government inquiry. The company disclosed that the FTC’s letter suggested an interest in a meeting to gather more information, describing the scrutiny as part of a “non-public inquiry.”
Reddit, boasting 17 billion posts and comments, is considered valuable for training AI models like chatbots. The platform recently struck a deal to license content to Google. However, both Reddit and Google have refrained from commenting on the matter. The FTC has declined to offer any remarks.
Data licensing for AI development has emerged as a potential upside for companies exploring generative AI. However, concerns have been raised about the ethical implications, including ownership rights and privacy issues.
Reddit’s Use of User Data for AI training
Reddit CEO Steve Huffman highlighted the company’s data as invaluable, emphasizing its significance in training future AI systems. Similarly, Google’s vice president, Rajan Patel, praised access to Reddit’s data for providing valuable insights.
The FTC’s scrutiny into data practices in the AI market is not new. Earlier, the agency requested information from major players like Microsoft, OpenAI, Amazon, Google, and others about their partnerships and potential anticompetitive practices.
While Reddit has been licensing data for various purposes for years, AI-related licensing is a relatively new venture. The platform introduced fees for large-scale access to user posts and comments last July, aiming to monetize its content. However, this move resulted in backlash from users, prompting concerns ahead of Reddit’s anticipated trading debut.
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