Reddit, Banned in China, Is Reportedly Set to Land £116 Million Investment From a Chinese Censorship Powerhouse

By Patrick Howell O'Neill on at

Who really thinks about where the money is coming from as long as you get the money?

Reddit is about to get a huge new round of investment of up to £232 million, reports TechCrunch. The first $116 million is reportedly expected to come from the Chinese tech giant Tencent, the first ever Asian technology company to pass a $500 billion (£388bn) market value.

The Reddit-Tencent marriage is complicated by the fact that Reddit, one of the most popular websites on the internet, is regularly – and is currently – blocked in China as part of the world’s most notorious and sophisticated censorship regime, the Great Firewall of China.

Further complicating matters is the fact that Tencent is not merely a resident on China’s internet – the company is one of the most important architects of the Great Firewall. It’s an interesting source of cash for a Silicon Valley company whose product is essentially speech.

Tencent is, at great cost and ultimately for great profit, literally reinventing censorship in China. The Great Firewall was not built by the Communist Party in Beijing, it’s built by the tech giants all around China. This opaque but clearly powerful relationship between the $500 billion company and the Chinese government raises interesting and unanswered questions about Tencent’s forays into the West, including questions about Reddit’s future.

“It is representative of the strange bedfellows that the interaction of the U.S. and Chinese technology systems creates,” said Adam Segal, a cybersecurity expert at the Council on Foreign Relations. “There is much bringing them together – money, people, and ideas. And there are serious political forces pulling them apart.”

Censorship monitoring organisation GreatFire.org’s statistics on Reddit in China show that it has been 100 percent blocked over the last 90 days.

Screenshot: GreatFire.org

“I think there’s a widespread misunderstanding of how censorship works in China,” said Adrian Shahbaz, the Research Director for Technology and Democracy at Freedom House. “We tend to think of Great Firewall as this huge thing the state has built. In reality, it’s the companies in charge of weeding out unfavorable information online. There’s a whole host of regulations, one new law passed on average every two days, about what content can and cannot appear online. Then it falls to Chinese companies to comply with this widespread censorship regime set by the communist party itself.”

Authoritarian state actors have a long, hypocritical history of internet censorship. The Iranian government bans Twitter, for instance, while high-level officials including the country’s president regularly use Twitter themselves. Chinese officials and state-owned media are even more popular on Twitter which is, of course, banned in China as well.

The pending Chinese investment in Reddit, a social media company with relatively little Chinese-language community, is a richer twist on that old tale, and it’s a part of Tencent’s expanding global investment strategy.

The Chinese company owns about 12 percent of Snap, for instance, even though Snapchat is banned in China. Tencent also owns a piece of the chat app Discord even though, you guessed it, Discord is blocked in China.

If Tencent does kick in £166 million on a nearly $3 billion valuation for Reddit, as TechCrunch reports, it will be interesting if we ever find out exactly what it means. What kind of influence and position, if any, will Tencent gain at Reddit? Neither company responded to Gizmodo’s questions.

Tencent has a long and intimate relationship with Chinese censors. They own the massively popular messaging app WeChat, which is closely watched and censored by the Chinese government to the point of Chinese citizens being arrested for comments made on the platform.

China requires close cooperation from all of its tech juggernauts. Tencent, by nature of being one of the biggest companies in Asia, does Beijing’s bidding at a wildly big scale: Over 1 billion monthly users on WeChat require some of the most technically cutting-edge surveillance and censorship techniques in the world in order to follow the government’s strict rules on speech.

Last year, researchers at Canada’s Citizen Lab reported on how Tencent is inventing new ways to censor both text and images on an unprecedented scale.

“The algorithms to perform this kind of image filtering are computationally expensive in terms of time and energy,” report author Jeffrey Knockel said. “Performing this type of filtering is the last thing Tencent wants to be wasting money on, but the fact that it does suggests that there is a large amount of pressure Tencent receives from the Chinese government to implement it.”

Reddit, which in the recent past had numerous executives say the company stood “for free speech,” is of course not alone in receiving the Tencent cash. In addition to Snap and Discord, Tencent’s accelerating investment program has grabbed a piece of over 600 diverse companies globally.

At this point, it would be a small shock if anyone ever turned them down.

“The question becomes who is going to change as a result of that relationship?” Freedom House’s Adrian Shahbaz said. “Is it that these companies are investing just to make money or are they trying to slowly change the norms of how these companies operate or even gather important intellectual property as a result of being on the inside? The broader question becomes, in the future is the internet going to make China more open, liberal and tolerant? Or because we’re all connected are we going to start adopting Chinese practices of censorship and surveillance?”

Chinese firms are also hardly alone in dishing out this kind of money. In Reddit’s last investment round, the company received money from VentureSouq. That’s a venture capital firm based in the United Arab Emirates, a small Persian Gulf nation notorious for censorship, surveillance, and jailing of internet users who criticize the local monarchy. China, however, is operating on a different scale entirely.

“These days, I tend to say that we’re a place for open and honest conversations – ‘open and honest’ meaning authentic, meaning messy, meaning the best and worst and realest and weirdest parts of humanity,” Reddit CEO Steve Huffman was quoted saying last year in the New Yorker.

Hey, you know who has trouble having open and honest conversations on the internet?

Featured image: Jerod Harris (Getty)