Meta maintains ‘significant’ market power in Australia: ACCC

Brandon How

Meta maintains significant market power in Australia despite the entry and popularity of TikTok, as well as smaller platforms like BeReal, according to a new report by the Australian Competition and Consumer Commission.

The sixth interim report of the Digital Platform Services inquiry, released on Friday, concluded that Meta continues to face “weak competitive constraints from other social media platforms”.

No further recommendations were made in addition to those in the Regulatory Reform Report, which suggested mandatory codes of conduct for “designated influential digital platforms” and a Digital Ombuds Scheme.

It also noted that there have been no “material entry or expansion” by alternatives to Meta platform services since 2019, when it was found to have “substantial market power” in the ACCC’s Digital Platforms Inquiry.

Logo at Meta Platforms headquarters in California. Image: Michael Vi/

The ACCC also does not expect any new competitors to successfully emerge as a close alternative to Meta platform services in the short or medium term.

TikTok is not an effective alternative to Meta platform services given its user base is concentrated among those aged under 25 and the high degree of product differentiation, according to the report.

It also remains to be seen if TikTok can retain its audience or expand into older age demographics, which Snapchat has been unable to do.

The report also highlights the “significant investment in platform promotion and user acquisition” as evidence for the ongoing high barrier to entry or expansion of social media services.

However, the Australian Competition and Consumer Commission (ACCC) also concluded that Meta’s market power “does not preclude other social media platforms from having market power”.

A larger ‘ad load’ – the amount of advertising impressions shown to users over time – on Facebook, compared to TikTok and Snapchat, could suggest that Meta does not face increased competition for users. Meta reported it had increased its advertising impressions by 18 per cent year on year in Q4 2022.

Harms stemming from a lack of effective competition among digital platform services include a lack of product innovation, a ‘gatekeeper’ for substantial volumes of online commerce, the potential for “undesirable ‘take-it-or-leave-it’” privacy policies, or engaging exploitative conduct like “the excessive costs, born by users, of providing personal data to access services”.

Similar warnings and investigations against Meta’s market power are also underway by the United States Federal Trade Commission, the United Kingdom Competition and Markets Authority, and the European Commission.

Many of the consumer and small business harms on social media harms considered in the report have previously been considered in several other ACCC inquiry reports.

ACCC chair Gina Cass-Gottlieb said the Digital Platform Services inquiry sixth interim report builds on the commission’s previous work in identifying social media services competition and consumer harms.

“We continue to support reforms to address the harms we’ve observed, including an economy-wide prohibition against unfair trading practices, targeted consumer protections and service specific codes of conduct that would apply to designated digital platforms,” Ms Cass-Gottlieb said.

“Globally, similar reforms continue to be progressed. For example, the European Digital Markets Act obligations due to apply in March 2024, and the UK Digital Markets, Competition and Consumers Bill being recently introduced to parliament.”

Do you know more? Contact James Riley via Email.

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