Before migrating to Lemmy, I decided to request a copy of the data Reddit has on me.
To my surprise, the export includes a file ip_logs.csv with a list of all IP addresses that I used to connect to Reddit for the last 3-4 months!!
That seems quite unnecessary.
What your IP address was at any given time cam be used by the people they sell this data to. They will look at a certain date at what your IP was and then pair that up with any other IP address they have from other sites. With that they can pair up this information to build a profile on you.
They could for example take Facebooks IP data which is easily linked directly to you, and match that with your Reddit profile. Now they know which Facebook user has which Reddit account and they can track your engagement across the two. Then add in the trackers in reddits advertising and they know what ads you have seen. Then add in Amazon’s data and they know what you have bought after seeing which ads on Reddit
It’s all part of the web of information that companies will collate and cross reference to build up detailed information on you to sell to 3rd parties