[Amends article in headline and first paragraph to reflect that the FTC is conducting an inquiry rather than an investigation]
Investing.com – The Federal Trade Commission is investigating Reddit over how the social media company plans to share and commercialize user data using third-party artificial intelligence models.
The company received a letter from the Federal Trade Commission (FTC) stating that “FTC staff are conducting a closed investigation into our sale, licensing, or sharing of user-generated content with third parties for training artificial intelligence models.” Reddit made the announcement in an update to its S-1 regulatory filing on Friday.
Reddit, however, believes it did not engage in “any unfair or deceptive trade practices,” adding that the FTC was seeking to learn about its plans and “intended to request information and documents from us while the investigation continues.”
The update comes just as the company embarks on an initial public offering ahead of its public market debut expected next week. Reddit plans to sell the shares at between $31 and $34 per share, potentially valuing the company at about $6.5 billion.