FTC Opens Inquiry Into Reddit's AI Data-Licensing and User Consent

In January 2024, Reddit entered into data-licensing agreements with a total contract value of roughly $203 million over two to three years. The most publicized was a deal with Google reported at around $60 million per year. These deals were a centerpiece of Reddit's pre-IPO revenue story; Reddit went public on March 21, 2024, under the ticker RDDT.

On March 14, 2024, Reddit received a letter from the Federal Trade Commission stating that FTC staff were conducting a non-public inquiry focused on Reddit's sale, licensing, or sharing of user-generated content with third parties to train AI models. Reddit disclosed the inquiry in an amended IPO prospectus filed with the SEC on March 15, 2024. The timing, days before the IPO, drew significant attention.

The episode crystallized a broader content-ownership and consent debate. Privacy advocates and digital-rights groups argued that users post on Reddit for discussion and community, not to have their often deeply personal contributions used to train commercial AI models, and that users receive no compensation and never meaningfully consented to having their words sold.

This tension echoed the 2023 API-pricing revolt, which had already strained Reddit's relationship with moderators and power users, and fed into the broader cultural argument that platforms are monetizing unpaid user labor for the AI boom.