Actually, I just learned about that, too. But it's nothing new. Shopping malls and supermarkets (allegedly even Walmart!) use "ghost shoppers" to make the store look busy. They're contractors hired to walk the aisles (they're also known as "aisle walkers"). The companies say they're there to stop shoplifting, but they're really there to make the store look like it's always busy. Casinos do this, too.

Also, many large blogs and forums use paid commenters to keep the site busy.

I can see why you'd think that. It's very convenient that Digg failed spectacularly exactly when Reddit was founded.

I looked into the backstory of the disastrous "Digg v4" that chased users away. This version changed the nature of the site, so that small publishers were pushed aside in favor of large publishers (Wall St Journal, CNN, etc.) Also, they removed the fan-favorite playful "bury" button. This made users feel like they were no longer the focus of the site, it was all about brands (reminds me of Twitter pre-Elon Musk takeover).

During development of the infamous Digg v4, one of the cofounders stepped down as CEO and handed it off to the other cofounder, citing irreconcilable differences in vision with the board of directors. Wow! Seems like the board of directors drove the ship into the iceberg. But who were they? It's hard to find that information. It was mostly generic Venture Capital firms, so nothing out of the ordinary.

So what about employees? During development of v4, they got a new VP of Product, Keval Desai, who came from Google. Also, the cofounder who took over after the CEO left, went on to work for Google Ventures, where he butted heads with Paul Graham over the internet (ironically) on the topic of VC firms low-balling founders. There had also been a new VP of Engineering, John Quinn, who oversaw the conversion from one database to another, and was fired after v4 failed. I believe this was misdirected, because Digg v4's issues were not technical problems, they were product problems.

My conclusion: There's no evidence that Digg was killed intentionally, although the company looks to have been very chaotic during that era, so it's possible.