ACCC inquiry targeting social media competition, scams and ads


Joseph Brookes
Senior Reporter

Facebook, Instagram, Twitter, TikTok, and Snapchat will be scrutinised by the competition regulator in a new inquiry launched as part of the watchdog’s ongoing examination of digital platforms.

The Australian Competition and Consumer Commission (ACCC) said it will look at the state of competition in social media, a market dominated by a handful of foreign firms, as well as potential consumer issues and the supply of advertising.

The findings will be handed to the Treasurer in March, marking the sixth interim report from the ACCC’s Digital Platform’s Branch, established to monitor the area after the landmark Digital Platforms Inquiry in 2019.

Facebook

An issues paper launched Tuesday will be open for submissions over the coming weeks with consultations to update the 2019 analysis which confirmed Meta (then-Facebook) held substantial market power in the provision of social media services.

The changing nature of social media services, which now include marketplaces, ecommerce, news and gaming, and new competition issues warrant an update to the 2019 findings, the regulator said.

96 per cent of adults used a communication or social media website or app last year, according to consumer research cited in the new issues paper.

Meta platforms still dominate but TikTok has grown rapidly and is keeping its average Australian user on its platform for nearly a full day per month.

“Given its rapid growth, reports have suggested that [TikTok’s] ad revenue in 2022 will be greater than that of Twitter and Snapchat combined,” the issues paper said.

TikTok, owned by China’s ByteDance, has also drawn increased scrutiny from US and Australian lawmakers after company executives revealed some of its China-based employees had access to certain information about American users.

However, the ACCC will be focused on the “competitive constraints” for both users and advertisers in the new inquiry, trends in social media mergers and acquisitions, as well as potential consumer issues like scams and misleading or deceptive content.

The advertising systems that monetise the user engagement will also be scrutinised, with the regulator asking several questions about the inner workings and impact of notoriously murky online advertising technology.

“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.”

The regulator will examine Facebook, Instagram, Twitter, TikTok, and Snapchat in the social media inquiry and will also consider other platforms with similar features like YouTube, Reddit and Discord, and the impact of new entrants like BeReal.

Do you know more? Contact James Riley via Email.

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