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FTC launches inquiry into Reddit's AI deals, ahead of IPO
Source: Axios
5 hours ago
The Federal Trade Commission has launched an inquiry into Reddit's licensing of user data to AI companies, according to a Friday afternoon disclosure by the social media company.
Why it matters: This comes just days before Reddit is expected to complete its long-awaited IPO.
It also suggests that the FTC is expanding its look into AI-related deals, which previously appeared to be focused on equity investments.
The latest: Reddit says it received a letter on Thursday, March 14, in which the FTC said it's "conducting a non-public inquiry focused on our sale, licensing, or sharing of user-generated content with third parties to train AI models."
The FTC also is expected to request a meeting with Reddit, plus various documents and information. Reddit says that it's "not surprised" by the FTC's interest, given the novel nature of these agreements.
The big picture: Reddit isn't the only company receiving these so-called "hold letters," according to a former FTC official who spoke with Axios on background.
Read more: https://www.axios.com/2024/03/15/reddit-generative-ai-license-user-data
Link to document filed to SEC - https://www.sec.gov/Archives/edgar/data/1713445/000162828024011448/reddit-sx1a2.htm
