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Even Innovative Platforms Are Susceptible to Anti-Competitive Practices

· July 9, 2013

Reddit is a strange, wonderful place, and an incubator of innovative thinking. The self-described “front page of the Internet” is a massive aggregator and a powerful crowdsourcer; users regularly oversee large scale, site-based projects with varying degrees of success. For example, Reddit has given countless dollars to charity organizations, but made a horrible mess out of identifying the Boston Bomber, causing controversy among the mainstream media. A recent Pew survey found that 6% of American adults are on Reddit. Reddit received 37 billion pageviews from 400 million unique visitors in 2012, driving heavy traffic to sites across the Internet.

As a popular aggregator with political and social clout, websites, politicians and companies frequently attempt to take advantage of Reddit. Redditors however, are fiercely defensive of their independence from economic influence, and fiercely critical of entities which attempt to profit from their traffic. However, given the wide reach of successful Reddit submissions, the site represents an immensely attractive platform for people looking to promote their sites and businesses.

By nature, Reddit is a unique content distributor. Content is voted on by users, with each account able to vote on submissions. Content is thus displayed democratically, based on user feedback. While there is some promoted content, in order to garner large volumes of upvotes (which leads to large volumes of traffic), Reddit has to actually like what you post. The site also features a host of complex devices to prevent most users from gaming the system for profit or “karma” — Reddit’s valueless currency. As an advertising model, Reddit seems well-suited to undercutting the incumbent advantage. Clout or industry presence does not give companies a license to widely distribute their content on Reddit. Rather, users pick the content they like, upvote it, comment on it and share it. Additional traffic, or monetary compensation, is a byproduct of a successful Reddit post, rather than its aim. The independent artists who regularly post and petition the site tend to do so for recognition rather than profit.

Of course there are exceptions. The r/IamA, or Ask Me Anything subreddit regularly features successful interviews with well known celebrities and politicians, from Barack Obama to Molly Ringwald. Other AmAs, particularly those which Redditors perceive as radically overt self-promotion are incredible failures. Woody Harrelson’s is the most famous. In that sense, Reddit is an unpredictable market; merely using it is not a guarantee of success. Self-promotion is frowned upon, and reporters or web hosts who regularly post their own content are banned by from the site.

In some ways, Reddit epitomizes the disruptive distribution techniques made possible by the Internet. However, structural realities within the site still provide ample opportunity for incumbents to take advantage of their positions. A recent controversy surrounding one website, meme generator, exemplifies the problem.

r/AdviceAnimals, Reddit’s home for memes, has nearly 2.7 million subscribers and is one of Reddit’s most popular pages. It also acts as one of the web’s most prolific meme bases, regularly spawning creations which spread across the Internet. For years, most of these submissions were generated by Quickmeme, a site which allows users to easily create or amend both iconic and original image macros. For years, Quickmeme experienced a lack of competition from other meme generators, even as similar sites, with a wider set of features, failed to gain traction. Two aspiring Reddit users began investigating the absence of other meme sites, and posted the following:

So it turns out /u/gtw08 [a mod on /r/AdviceAnimals] is the owner of quickmeme.Here is an article about Wayne Miltz, who owns Miltz Media with his brother. Miltz Media owns quickmeme proof. Both of these articles are public and therefore do not violate reddit’s rules regarding personal info. /u/manwithoutmodem,/u/yourfriendshateyou, and I have found evidence of this and of vote manipulation.

It turned out that one of Quickmeme’s founders had embedded himself as a moderator of r/AdviceAnimals. He had used that power to delete posts from other sites, and upvoting submissions that came from Quickmeme, driving traffic to his site. In other words, he successfully gamed Reddit’s system, and used its regulatory structure to drive out competition. Ultimately, both Quickmeme and u/gtwo08 were banned from Reddit. In their places, Imgur, the image hosting site, rolled out their own meme generator, and other sites are beginning to make a comeback, competing for traffic based on unique features.

Reddit’s “marketplace” is itself an innovative product, but that doesn’t mitigate the incentive for incumbents to cheat. As soon as u/gtwo8 gained access to Reddit’s levers of power, he used them to circumvent competition and keep out innovative rivals. The fact that he did so on a disruptive platform did not prevent his anti-competitive practices; he simply adapted to the marketplace. In that sense, even a disrupted market is not immune to opponents of innovation. Luckily, Reddit’s structural and incidental defenses against gaming the system are robust, and underscore the importance of remaining vigilant of obstacles to innovation, even on the Internet’s most disruptive corners.

Benjy Cannon is an intern at the Computer & Communications Industry Association, and an avid Redditor. 

Competition

Some, if not all of society’s most useful innovations are the byproduct of competition. In fact, although it may sound counterintuitive, innovation often flourishes when an incumbent is threatened by a new entrant because the threat of losing users to the competition drives product improvement. The Internet and the products and companies it has enabled are no exception; companies need to constantly stay on their toes, as the next startup is ready to knock them down with a better product.

Innovation

New technologies are constantly emerging that promise to change our lives for the better. These disruptive technologies give us an increase in choice, make technologies more accessible, make things more affordable, and give consumers a voice. And the pace of innovation has only quickened in recent years, as the Internet has enabled a wave of new, inter-connected devices that have benefited consumers around the world, seemingly in all aspects of their lives. Preserving an innovation-friendly market is, therefore, tantamount not only to businesses but society at large.