Reddit CEO Steve Huffman defends platform’s role in GameStop’s rise

Testifying before Congress on Thursday, Reddit CEO Steve Huffman defended the role Reddit played in the GameStop stock spike in January.

Huffman told members of the House Financial Services Committee during a hearing Thursday that Reddit did not detect any significant activity by bots or foreign actors on the WallStreetBets subdirectory. Users in the online community helped spark a buying frenzy last month for high-selling stocks like GameStop and AMC.

As retail traders continued to buy once unwanted stocks, lawmakers and media watchers wondered who really was behind the positions that run trading and how such a mechanism could be manipulated.

Huffman testified that Reddit’s moderation mechanism makes it particularly effective at removing bad information. The site allows users to vote up or down to increase or decrease their visibility. Moderators from different communities help enforce the rules in their corners of the platform. Huffman said Reddit has invested heavily in the voting system and that WallStreetBets moderators have done a “great job.”

“Our user base is exceptionally good at picking up untruths, misinformation, false stories, both within this community and on Reddit in general,” Huffman said. “For any content to be successful on Reddit, it has to be accepted by this community and receive the same number of votes as anything else.”

While users don’t need to use their real identities, Huffman said asking them to do so won’t necessarily make the site more secure.

“Other platforms have a real identity and that does nothing to improve their behavior,” he said.

Financial advice from Reddit users may in fact be more reliable than advice from traditional media, Huffman suggested.

“People can say, in fact they’re doing it all the time on TV, encouraging people to make what I would call bad investment decisions,” Huffman said. “On Reddit, I think investment advice is probably among the best because it has to be accepted by thousands of people before you get that kind of exposure.”

Reddit is largely shielded from legal liability for its users’ posts by a law known as Section 230 of the Decency of Communications 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 caught the attention of lawmakers on both sides of the aisle who believe it unfairly shields them from liability for their products.

Still, Huffman has suggested his company could be held accountable for what goes on on his platform. Huffman later noted that Reddit could still face civil lawsuits.

“Reddit can be held accountable and we take our responsibilities here very seriously,” he said.

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