Reddit CEO Steve Huffman testified before Congress on Thursday, defending the role Reddit played in the rise of GameStop shares in January.
Huffman told a House Financial Services Committee hearing on Thursday that Reddit did not detect any significant activity being driven by bots or foreign players on the WallStreetBets subreddit. Users in the online community helped give a buying boost to stocks like GameStop and AMC last month.
As retailers continued to buy even unwanted shares, lawmakers and media observers raised questions about who was really behind the trading posts and how such a mechanism could be manipulated.
Huffman testified that Reddit’s moderation mechanism makes it particularly good at erasing bad information. The site allows users to vote on or off comments to increase or decrease their visibility. Moderators from different communities help to apply the rules in their corners of the platform. Huffman said Reddit has invested heavily in the voting system and that the WallStreetBets moderators have done an excellent job.
“Our user base is extremely good at clearing up untruths, misinformation, false stories, both within the community and Reddit in general,” Huffman said. “For any content on Reddit to be successful, it must be accepted by the community and receive the same amount of votes as anything else would do.”
Although users do not have to use their real identity, Huffman said it would not necessarily be safer to do so.
“Other platforms have a real identity and it does nothing to improve their behavior,” he said.
Huffman said financial advice from Reddit users may be more reliable than advice from traditional media.
“People can say they do it on television all the time, encouraging people to make what I would call bad investment decisions,” Huffman said. “On Reddit, I think, investment advice is actually one of the best, because it has to be accepted by thousands of people before they get such visibility.”
Reddit is largely protected from legal liability for their users’ posts through a law known as Section 230 of the Communications Decency Act. The legislation protects online platforms from liability for user placements and also enables them to freely moderate or remove content as they see fit. The law has investigated legislators on both sides of the aisle who believe it unfairly protects them from liability for their products.
However, Huffman suggested that his company be held accountable for things that happen on the platform. Later, Huffman noted that Reddit may 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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