Reddit shares fell 3.4% in afternoon trading after the European Union officially designated the company as a Very Large Online Platform under the Digital Services Act, a classification triggered by its user base exceeding 45 million monthly active users in the bloc. According to The Wall Street Journal, this designation requires Reddit to comply with stricter anti-harm standards and systemic risk assessments by the end of December 2026, or face penalties of up to 6% of its annual global revenue. The enhanced oversight grants the European Commission investigative powers to probe the platform's algorithms and content moderation practices. After the initial drop, shares recovered slightly to $148.08, down 3.2% from the previous close. Reddit is down 38.8% since the beginning of the year and trades 45.3% below its 52-week high of $270.71 from September 2025.
Reddit, Inc.EU designates Reddit as Very Large Online Platform, imposing stricter compliance and potential fines.
