In the summer of 2023, Reddit—a behemoth of a website that is simultaneously a news aggregator and a sprawling network of discussion boards—decided to begin charging software developers for access to its Application Program Interface (commonly referred to as an API), a software interface that allows two or more computer programs to communicate with one another and exchange data.[1] Historically, Reddit had allowed developers to access the API for free, which led to a cottage industry of third-party Reddit applications, such as Apollo and Reddit is Fun, that were more popular with users than the official Reddit mobile app.[2] But according to Reddit CEO Steve Huffman, the company itself is not turning a profit.[3] Moreover, the infrastructure that supports third-party applications costs the company $10 million per year to operate.[4] As the company inches closer to its IPO, currently projected to take place in the first quarter of 2024, it faces increasing pressure to reduce losses and make itself more attractive to investors.[5] When framed in this light, Reddit’s decision to begin charging for access to its API seems like a standard cost-cutting measure. There was, however, another factor that motivated the company: the proliferation of companies that are developing artificial intelligence systems, many of which use Reddit posts to train their bots.[6] Huffman frames this usage as an unauthorized use of Reddit’s content; in so doing, he positions the company as an uncompensated creator whose intellectual property is being used by Big Tech companies who wish to profit from Reddit’s content without returning “any of that value” to Reddit itself.[7]

The wrinkle in Huffman’s argument is evident to anyone who has ever used Reddit, or any other social media platform: Reddit’s content is not created exclusively by agents of the corporation. It is created by Reddit’s 57 million daily users and 812 million monthly users, the vast majority of whom do not have a principal-agent relationship with the company.[8] By framing Reddit, Inc. as the generator and rightful owner of the content that the company is hiding behind a paywall, Huffman is obscuring the role that users play in creating Reddit’s content and making the corporation valuable.

There is no doubt about the fact that Reddit, Inc. is within its legal rights to charge third parties for API access, even if the data that is being accessed was not generated by the corporation’s agents. Reddit’s User Agreement states that, while users retain ownership rights to their content, they nevertheless grant Reddit a “worldwide, royalty-free, perpetual, irrevocable, non-exclusive, transferable and sublicensable license” to use user-generated content in a wide variety of ways and in “all media formats and channels now known or later developed anywhere in the world.”[9] By posting on the website, users give Reddit permission to use their content in any manner that the corporation pleases—including by selling that content to tech companies eager to train their AI bots.

But while Reddit, Inc. may be within its legal rights, its actions give users good reason to rethink their relationship with the corporation—and, indeed, with virtually every other social media platform they use. Users of social media websites are not simply consumers of a product; if they were, there would not be a market for their posts. The fact of the matter is that content created by users of social media has value. If it didn’t, Reddit would not bother to put access to its API behind a paywall. As of this writing, Reddit, Inc. is valuated at $10 billion USD, and virtually all of that value stems from the content that is created and posted by Reddit users.[10] However, Reddit users will not see any compensation from whatever riches the corporation reaps after its IPO: that will go to large investors such as Tencent, Sequoia Capital, Andreessen Horowitz, Fidelity Investments, and Advance Publications.[11] This is a fundamentally unjust arrangement that alienates content creators from their labor and the fruits thereof, and an arrangement that Reddit’s unnegotiable User Agreement actively promotes. It may seem strange to think of the contents of the average Reddit post as a work product. But if tech companies are willing to pay for access to the words written by Reddit users, it stands to reason that the users themselves have performed an act of labor that is worthy of renumeration.

Every time users post content to platforms like Reddit, they are entering into something not unlike a business transaction, exchanging their intellectual property for access to a posting platform. What’s more, by dint of agreeing to an unnegotiable User Agreement when creating their accounts, users are giving the corporation an unfathomably broad license to profit massively from their intellectual property—a profit that, to paraphrase Huffman, never returns to enrich the users themselves. As the social media landscape continues to evolve, users may want to rethink the value of the content and data they post to these platforms. While users may perceive themselves as engaged in acts of recreation when they post on social media, the companies that run those social media platforms never lose sight of the fact that they are engaged in a business transaction—and that the data they extract from users can be used to generate revenue. Reddit is hardly the only social media company that generates revenue from its use of user data; Facebook, in particular, is infamous for the practice.[12] In light of this, it may be time for the users of social media to stop viewing themselves as consumers and start perceiving themselves as participants in business transactions who should be able to negotiate the terms of their relationships with their corporate counterparties.


[1] Jay Peters, How Reddit Crushed the Biggest Protest in its History, The Verge (Jun. 30, 2023, 10:15 AM), [].

[2] Id.

[3] Id.

[4] Id.

[5] Sawdah Bhaimiya, Reddit’s Cofounder Said That at First the Company Felt Like ‘A Homework Assignment That Got Out of Hand’ Rather Than a Business, Business Insider (Dec. 20, 2023, 8:45 AM), [].

[6] Faustine Ngila, AI Bots Trained on Reddit Conversations. Now Reddit Wants to be Paid for It, Quartz (Apr. 19, 2023), [].

[7] Mike Issac, Reddit Wants to Get Paid for Helping to Teach Big A.I. Systems, New York Times (Apr. 18, 2023), [].

[8] Reddit Revenue and Usage Statistics (2024), Business of Apps, [].

[9] Reddit User Agreement, Reddit, [].

[10] Shannon Thaler, Reddit Poised for Blockbuster Stock Market Debut in March: Reports, New York Post (Jan. 18, 2024, 3:16 PM), [].

[11] Id.

[12] Ariel Zilber, Facebook Users’ Personal Data Sent to Thousands of Companies: Study, New York Post, (Jan. 18, 2024, 1:03 PM), [].

Saturday, January 20, 2024