Reddit CEO and co-founder Steve Huffman
Source: CNBC | You Tube
Witnessing before Congress on Thursday, Reddit CEO Steve Huffman defended the role that Reddit played in raising GameStop’s stock in January.
Huffman told members of the House’s Financial Services Committee at a hearing on Thursday that Reddit did not detect any significant activity conducted by foreign bots or actors on the WallStreetBets subreddit. Users of the online community helped trigger a shopping frenzy last month for highly sold stocks like GameStop and AMC.
As retail traders continued to buy previously undesirable stocks, lawmakers and media watchers raised questions about who was really behind the posts that led the negotiations and how that mechanism could be manipulated.
Huffman testified that Reddit’s moderation mechanism makes him particularly good at eliminating bad information. The site allows users to vote on comments to increase or decrease their visibility. Moderators from different communities help to enforce the rules in their corners of the platform. Huffman said that Reddit invested heavily in the voting system and that the moderators at WallStreetBets did an “excellent job”.
“Our user base is exceptionally good at sniffing untruths, misinformation, false stories, both within this community and on Reddit in general,” said Huffman. “For any content to be successful on Reddit, it must be accepted by the community and receive the same amount of votes as anything else.”
Although users do not need to use their real identities, Huffman said that asking them to do so would not make the site more secure.
“Other platforms have a real identity and do nothing to improve their behavior,” he said.
The financial advice of Reddit users may actually be more reliable than the advice of traditional media, suggested Huffman.
“People can say, in fact, they do it on television all the time, that they encourage people to make what I would call bad investment decisions,” said Huffman. “At Reddit, I think, investment advice is probably among the best because it has to be accepted by many thousands of people before it can get that kind of visibility.”
Reddit is largely protected from legal liability for its users ‘posts through a law known as Section 230 of the Communications Decency Act. The legislation protects online platforms from liability for users’ posts and also allows them to freely moderate or remove content as they see fit. The law has drawn scrutiny from lawmakers on both sides of the corridor, who believe it unfairly protects them from liability for their products.
Still, Huffman suggested that his company could be held responsible for things that happen on his platform. Huffman later noted that Reddit could still be subject to civil litigation.
“Reddit can be held accountable and we take our responsibilities here incredibly seriously,” he said.
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