Reddit is an online discussion platform whose forums, called subreddits, appear in The Bob Zadek Show in two principal contexts: as a lightly moderated site cited in a discussion of social media content moderation, and as the home of the WallStreetBets forum during the 2021 GameStop short squeeze. A third episode treats Reddit as one of the platforms that does not require users to post under their real names.
The platform business model and moderation
In a July 2020 episode on government regulation of tech censorship, Bob Zadek framed the discussion around Facebook as a for-profit corporation owned by shareholders and managed by a board of directors, and asked guest John Samples to explain the category of business activity called a platform. Samples described multi-sided platforms, saying Facebook does not produce a product and sell it to customers but provides a service that attracts users, whose data and online behavior are then used to direct advertising. He said the business connects users on one side and advertisers on the other, and that without users there is no revenue. Why Government Regulation of Tech Censorship is Undesirable (2020)
Samples argued that content moderation follows from that business model: if a platform does not exclude some things, it will have trouble attracting users. He cited Reddit as an example, saying that some of its subreddits and discussion forums were not moderated very heavily, that this attracted political issues, and that Reddit has never been a big money maker. He grouped it with 8chan as places with low moderation, and said that is one model of what might happen without some moderation. Why Government Regulation of Tech Censorship is Undesirable (2020)
Bob offered network television as an analogy for the business model, describing free content that draws “eyeballs” that are then delivered to advertisers, and said Facebook can be far more granular. Samples called the granular part crucial, saying it is the best form of directing advertising in the history of the world and that in the past the number could be as small as 500 people; he recounted receiving an advertisement on Facebook that had his name in it. Why Government Regulation of Tech Censorship is Undesirable (2020)
WallStreetBets and the GameStop short squeeze
A February 2021 episode with Jennifer Schulp of the Cato Institute examined the GameStop short squeeze and the roles of Reddit’s WallStreetBets and the Robinhood trading platform. Why the Freakout About GameStop? (2021)
Asked by Bob to explain what WallStreetBets is, Schulp described it as the Reddit forum, a virtual meeting place of sorts, where Roaring Kitty and others talked about the stock. She said it was the hub for activity and excitement about GameStop stock, that it did not pop up specifically for GameStop, and that it had been a functioning forum for quite some time with a community that shared stock tips and research. She said the congressional testimony brought in the CEO of Reddit to talk, and compared people talking online to a cocktail party, an email, or a conference of investment professionals discussing stock picks. Why the Freakout About GameStop? (2021)
Bob asked whether investors saying “Let’s all buy GameStop stock today, right now” and taking long positions together was market manipulation. Schulp said that activity is not per se unlawful without more facts, and that the day-to-day use of the word manipulation differs from the legal definition. She said manipulation traditionally and in some sections of the securities laws requires false, misleading, or deceptive behavior, and that she had seen no evidence in the public domain fitting that definition. Why the Freakout About GameStop? (2021)
Schulp described the mechanics: GameStop stock started to rise and then reached what she called meteoric heights at the end of January. She said Roaring Kitty had been pushing on WallStreetBets the idea that GameStop was undervalued and encouraging people to invest, while many mostly hedge funds were betting against the company by short selling. She said there was so much short selling interest that there were more shorts out than there was total float of the stock. Why the Freakout About GameStop? (2021)
Bob characterized the traders as small investors banding together and asked whether the banding together was itself wrongful. Schulp said that based on what was publicly known at that point she would say no laws were broken, with the caveat that things could have happened behind the scenes she did not have access to, including possibly misleading information on WallStreetBets or problems with how the hedge funds were shorting. She summarized: a bunch of people on Reddit got together and said “Let’s buy this stock,” the stock went up, and there is no legal problem. Why the Freakout About GameStop? (2021)
Gamified trading and the regulatory response
Bob raised the Robinhood website, noting that the nature of the platform itself got regulators’ attention. Schulp said Robinhood and competitors such as Webull and eToro are app-based first, designed for mobile phones, sleeker and more modern, and aimed at a younger demographic. She said Robinhood and its ilk, along with discount brokerages that followed, offer zero-commission trading, and that before the end of 2019 a trade generally cost $3, $5, or less. She named Schwab, TD Ameritrade and E-Trade as among those that followed. Why the Freakout About GameStop? (2021)
Schulp said these apps incorporate elements some view as more appropriate to games, citing confetti on Robinhood’s screen after a trade or deposit, lists of the top 10 most traded stocks on Robinhood, and suggestions that a user who bought one stock might also look at others. She said the apps brought in many new people to trading and investing who might have been put off by clunkier systems or by what she called the stodginess of trading; Bob added “boring,” and Schulp agreed. Why the Freakout About GameStop? (2021)
Anonymity and real-name policies
In a March 2022 episode on anonymity, Jeff Kosseff discussed platforms that make a voluntary decision to require people to post under their real names. He said companies like Facebook are free to set such policies and have justifications for safety, namely a belief that people behave better under their real names; he said he disagrees with that justification. He contrasted Reddit and Twitter, which he said actively market services that do not require your real name: they do not allow impersonation, but they do not require real names either. The United States of Anonymous (2022)
Kosseff said that is fine as long as outlets remain where people can post pseudonymously, because many who rely on anonymity do not have the luxury of speaking under their real names — people speaking out about a corrupt employer, or people in a political minority in their community who fear retaliation. He said the real threats to anonymous speech come less from government subpoenas or new laws than from private companies’ control over personal data and speech, and that the area needing more laws is identifying information held by private companies, such as facial recognition and geolocation data that data brokers can sell. He recommended Kashmir Hill’s reporting in the New York Times on Clearview AI, which he said more than 600 police departments use and which scrapes social media pictures to identify someone by facial recognition. The United States of Anonymous (2022)
Across episodes: Reddit as a private actor
The episodes do not develop a single argument about Reddit across time; they use it for different purposes. In the 2020 episode, Samples cites Reddit’s lightly moderated subreddits as evidence that low moderation is a business model with costs, noting Reddit has never been a big money maker. In the 2021 episode, Schulp treats WallStreetBets as an ordinary forum whose members’ collective buying was not per se unlawful, and notes that Congress summoned Reddit’s CEO to testify. In the 2022 episode, Kosseff treats Reddit’s refusal to require real names as a voluntary policy choice that preserves pseudonymous speech. What changes between the earlier and later treatments is the frame: moderation as a business necessity, then forum activity as legally protected, then platform policy as a speech safeguard. Bob Zadek frames the questions in the first two episodes; Schulp and Kosseff supply the analysis in the second and third.
What the sources do not cover
The excerpts do not state when Reddit was founded, who owns it, or where it is based, and they do not describe its corporate structure as they do Facebook’s. They do not name the specific subreddits involved beyond WallStreetBets, nor any statute, bill or case governing platform liability. The excerpts also do not report the outcome of any regulatory action against Reddit or WallStreetBets, and the 2020 episode breaks off before the discussion of Section 230 begins.