Social Media

Competition watchdog the ACCC is turning its attention to how companies use social media

- August 16, 2022 2 MIN READ
The ACCC’s Digital Platforms Services Inquiry will dive into competition for social media services in Australia as part of the sixth interim report of the regulator’s five-year Digital Platform Services Inquiry.

The competition watchdog will also look at consumer issues, such as the way that businesses use social media advertising services, including paid influencers.

An issues paper was released today outlining the key issues for the latest report, which the ACCC says will build on and update its analysis of competition in the social media services sector, from the 2019 Digital Platforms Inquiry.

The inquiry concluded that the market power of Google and Facebook had distorted the ability of businesses to compete on their merits in a range of markets, including advertising and media. Digital advertising was particularly “opaque”, while news services became reliant on the dominant digital platforms, but faced difficulties monetising the content.

The subsequent battle over that power and moves by the former Coalition government to force Facebook and Google to pay media companies for news led Facebook to ban Australian news media from its site.

But the algorithm the company deployed to pull media sites, also scrubbed out posts by numerous government departments, hospitals, arts organisations, ASX-listed companies, and essential services, including Fire and Rescue NSW, the Bureau of Meteorology, the Dept of Fire and Emergency Services WA, Queensland Health, The Children’s Cancer Institute, and Victorian Aboriginal Legal Aid.

Whistleblowers subsequently accused Facebook of deliberately taking down important non-news pages during its 2021 fight over paying for news.

The competition issues under the ACCC’s microscope in the new inquiry include barriers to entry and expansion faced by new platforms, and the hurdles and costs faced by consumers and businesses when they try to switch services.

The impact of scams and the risk of being exposed to misleading or deceptive content from businesses via social media is also on the hit list.

In March this year, the ACCC joined Andrew Forrest in suing Facebook over celebrity scam ads.

Australians lost more than $144 million to scams on social media in last year, almost double the 2020 figure.

ACCC Chair Gina Cass-Gottlieb said social media has become an essential tool for many businesses.

“We want to hear from businesses and consumers about their experiences with social media services, including with Facebook, Instagram, Twitter, TikTok and Snapchat. We hope to examine trends in user preferences and engagement over time, and consider how users choose social media services,” she said.

“We are also eager to receive feedback on the barriers to entry and expansion for social media services in Australia, and if new entrants such as TikTok have changed the competitive landscape for social media services in Australia.

The ACCC is also seeking views on the use and abuse of social media services for scams and misleading or deceptive content.

Submissions can be made to [email protected] by  September 9.