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Have rivals broken Facebook’s social media monopoly? | Information Age | #socialmedia | #hacking | #aihp


The rapid rise of TikTok has changed the social media landscape so much that the ACCC will target its latest investigation on the way competition amongst social media apps affects their use for advertising, ‘influencers’, sponsored posts, online scams, and abuse.

Announced with the release of a formal issues paper that is open for comment until 9 September, the sixth interim report of the ACCC’s five-year Digital Platform Services Inquiry (DPSI) will explore consumers’ experiences with a social media landscape that has expanded rapidly in recent years as social platforms add features in the fight for advertiser dollars.

Whereas Facebook dominated the market when the DPSI was released in 2019, the ACCC said, the success of TikTok showed that competition was increasing – and the consumer organisation, ACCC chair Gina Cass-Gottlieb said, wants to know more about businesses’ and consumers’ experiences using them.

“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,” Cass-Gottlieb said in launching the issues paper.

“We hope to examine trends in user preferences and engagement over time, and consider how users choose social media services,” she said, noting that the enquiry will also consider barriers to entry faced by new platforms – as well as the “hurdles and costs” consumers face in switching between social media services.

The enquiry – which will publish its report by 31 March 2023 – will primarily focus on Facebook, Instagram, Twitter, TikTok, and Snapchat but will also consider social services like YouTube, Reddit, Discord, and BeReal.

With 2.91 billion global users on Facebook, 2.56 billion on YouTube, 2 billion on WhatsApp and 1 billion on TikTok, the platforms covered by the enquiry dominate a global social media landscape that has rapidly added new capabilities including events, livestreaming, gaming, short-form video, tagging, and more.

Social media apps are near ubiquitous in Australia, with the Australian Communications and Media Authority (ACMA) finding that 96 per cent of Australians had used the tools during the first half of 2021 – with Facebook used by 75 per cent, Instagram 44 per cent, Snapchat 20 per cent, Twitter 16 per cent, and TikTok 15 per cent.

Is sameness good or bad for consumers?

With such strong mindshare amongst everyday Australians, intense rivalry between social media apps has driven copying of other platforms’ features – particularly the ‘TikTok effect’ as the platform’s rise fuels copycats like Facebook Short Video Clips and a video-focused redesign of Twitter’s Explore page.

The ACCC will explore the degree to which this trend has been affected by the “switching costs” of changing platforms, and users’ ability to ‘multi-home’ by using more than one platform for the same type of service.

It will also explore the links between the platforms’ commerce features and their consumer appeal, as well as evaluating social media platforms’ role as enablers for a range of “consumer harms”, as the report puts it.

This includes through the proliferation of scams – which took $2 billion from Australians last year alone – and “misleading and deceptive” advertising like the “disgraceful” scam ads that earlier this year drove the ACCC to sue Meta, just weeks after mining magnate Andrew Forrest also sued the company for running fraudulent ads featuring his likeness.

With TikTok influencers promoting high-risk cryptocurrencies and scammers promising prizes to unsuspecting victims, the ACCC is concerned that social media apps have given scammers a direct line to consumers.

The report’s investigations include 31 questions focused around three key issues, including an overview of the supply of social media services, trends in the supply of social media services, and the relationships between social media platforms and consumers.

The report will ultimately update the ACCC’s previous finding – that Facebook had “substantial market power” in Australia’s social market – to reflect the changes in the market in intervening years.

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

The fifth interim report of the DPSI – which will evaluate whether Australia’s competition and consumer protection laws are sufficient to address issues identified during the DPSI to date – attracted over 90 submissions and will be provided to the Treasurer by 30 September.

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