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this post was submitted on 22 Jun 2023
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Technology
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The other thing is that they've just handled things so incredibly badly. Limited communication largely directed at third-party media sites, erratic rules changes and enforcement, doubling down with heavy-handed admin actions.
I think that even beyond a need for profit they lost sight of why they have substantial value in the first place. The majority of their value came from their community which made "the front page of the internet" a pretty honest claim. Their software isn't worth billions, but the front page of the internet sure is. They should have had a substantial community engagement department specifically to kiss ass and build relationships with mods (and users via AMAs) so that open lines of communication existed - and they probably should have taken control over key things like inserting an employee as top mod of the top 50 subs (make it standard practice for hitting top 50, offer cool extra services like a visit to HQ and such for the mods so its like they "win" rather than "reddit seizes control" even if that's what it is).
Instead they stayed way too hands-off and basically treated their community as an afterthought. The poor communication made me feel disrespected as a user, so I can only imagine what its like for the mods who put far more time and effort in and are in the direct line of fire of erratic admin actions. I mean, this isn't even hard. Just make a vague corporate statement that you're "very sorry" about all the "confusion" and you'll be "putting changes on hold an re-evaluating while you work with various parties to come up with solutions". You make some token concessions and then do 80% of what you were gonna do anyway, 1-2 months later. Its dishonest and shitty but it's not rocket science to take some of the fuel away from the fire. Like, do they even have a PR department or... did they completely forget that the community even mattered?
If Reddit has an employee on staff as a mod that can approve posts, then they lose safe harbor protections. Anything that mod approves is considered representative of Reddit, giving them editorial control and causing them to be handled more strictly. https://caselaw.findlaw.com/court/us-9th-circuit/1856011.html
Further, if Reddit gave bonuses to mods, then mods would be considered unpaid employees. Any kind of "swag" or quid pro quo for being a mod of a big subreddit increases the chances that those moderators will be considered unpaid employees by the Department of Labor. AOL famously got in big trouble for giving free/discounted internet access to their volunteer moderators. https://casetext.com/case/hallissey-v-america-online-inc-sdny-2002 (Settled in 2009 for $15 million in back pay.)
Combining the two is terrible news for Reddit and would make their business model absolutely unsustainable. Every mod would be an employee and every post would be representative of Reddit as a company. If a mod approves a link to copyrighted material, then Reddit could be sued.
Respectfully, I think you're overreading the meaning of the Mavrix Photos case. That case involved the most popular LiveJournal community, moderated by a team led by a literal employee, where the mods reviewed the submissions by users before posting, and only posted about 1/3 of the submitted content. It was a human-required process for anything to be posted at all, and it went through the moderation team that was arguably controlled by LiveJournal. And even then, the appellate court sent it back down to the trial court to figure out whether a jury would determine whether that procedure counts as content being posted at the direction of a user, rather than at the direction of the company. It also made clear that some pre-posting review would still be OK even by the company's agents/employees, such as when they manually review for pornography/spam/etc.
And after this year's Supreme Court decision in Twitter v. Taamneh, which reversed the Ninth Circuit's ruling that Twitter and similar companies could be liable for user activity on those services, it's pretty clear that having paid/employed moderators doesn't actually make services liable for what they fail to stop on their platforms. Liability will only happen when an employee actually does the thing that gives rise to liability (e.g., posting infringing material themselves).
So no, I disagree with your analysis that paying or compensating moderators gives rise to risk of liability. Especially after the most recent Supreme Court cases on Twitter and Google, which call the Mavrix reasoning into question.