ACCC to examine competition and consumer concerns with social media

16 August 2022

The ACCC’s Digital Platforms Services Inquiry will examine the state of competition for social media services in Australia as part of the sixth interim report of the ACCC’s five-year Digital Platform Services Inquiry.

The ACCC will also consider potential consumer issues, including the way that businesses are using social media advertising services such as display advertising, sponsored posts and paid influencers to engage with and advertise to consumers.

The sixth interim report will build on and update the extensive analysis of competition in the social media services sector, published in the ACCC’s 2019 Digital Platforms Inquiry.

Businesses, consumers and other stakeholders are encouraged to respond to an issues paper released today, which will inform the sixth interim report.

The ACCC will examine competition issues involving social media services, including barriers to entry and expansion faced by new platforms, and hurdles and costs faced by consumers and businesses when they try to switch services.

The ACCC will also consider consumers’ experiences with social media, including through the impact of scams and the risk of being exposed to misleading or deceptive content by businesses through social media.

“Social media has become an essential tool for many businesses as they seek to widen their customer bases and engage and communicate with consumers, and for individual consumers to connect and communicate with each other and access critical information,” ACCC Chair Gina Cass-Gottlieb said.

“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.”

In its Digital Platforms Inquiry, the ACCC concluded that Facebook (now Meta) had substantial market power in the provision of social media services in Australia. This report will update the ACCC’s assessment of these services and consider changes that have occurred since 2019.

“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,” Ms Cass-Gottlieb said.

The ACCC is also seeking views on the use and abuse of social media services for scams and misleading or deceptive content. Australians lost more than $144 million to scams on social media in 2021, almost double the amount recorded in 2020 and four times the amount in 2017.

Views on the effectiveness of processes offered by social media platforms for consumers and business to report potentially misleading claims in social media advertising are also encouraged.

Submissions can be made to digitalmonitoring@accc.gov.au by 9 September 2022.

Background:

The ACCC’s Digital Platforms Branch is conducting a five-year inquiry into markets for the supply of digital platform services in Australia and their impacts on competition and consumers, following a direction from the Treasurer. This inquiry will report to the Treasurer every six months and will examine different forms of digital platform services, their advertising services as well as data brokers.

This issues paper will inform the ACCC’s sixth report due to be submitted to the Treasurer by 31 March 2023.

The ACCC’s fifth report into the need for new regulatory framework to address the competition and consumer concerns identified in digital platform services markets to date is due to the Treasurer by 30 September 2022.

Social media platforms which the ACCC will focus on for the sixth report will include Facebook, Instagram, Twitter, TikTok, and Snapchat. Other platforms that contain similar features to those in social media services, such as YouTube, Reddit and Discord will also be considered. The ACCC will also look at the entry of new social media platforms in Australia such as BeReal.

Release number: 
110/22
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