ACCC says Meta still the biggest social media player with TikTok, Twitter and Snapchat competition ‘weak’

The Australian competition watchdog has determined that Facebook’s parent company, Meta, holds significant market power in social media services and that,despite Meta’s best efforts to downplay its influence, platforms like TikTok don’t pose strong competitive constraints to it.

This assessment was handed down in the latest digital platforms inquiry report from the Australian Competition and Consumer Commission (ACCC) published today.

It highlighted that while Meta’s closest competitors are TikTok, Twitter and Snapchat, they offer different functionalities and are used by consumers in different ways, hence posing “weak” competition.

The report said barriers to entry and expansion for the provision of social media remain high. For new entrants, scaling and monetising their services are especially difficult.

Meanwhile, Facebook and Instagram are already widely used by advertisers, which puts Meta in an advantageous position to “replicate features of its rivals, or to buy out competitive threats”.

This evaluation echoed the argument thatTikTok put forward in its submission to the reportlast year, where it positioned itself as a “challenger” seeking to diversify the digital platform landscape.

In response, a Meta spokesperson said: “The ACCC’s report fails to consider the fierce competition Meta faces from other technology and social media platforms which have grown exponentially since the last ACCC review.

“We innovate, create better experiences, and focus on making the best products in the world every day to earn the time and attention of people and businesses.”

Other new findings outlined in the report include that social media companies are failing to protect their users from falling victim to scammers and promote healthy influencer sponsorship practices. The regulator also launcheda sweep earlier this yeararound misleading social media influencer posts.

ACCC chair Gina Cass-Gottlieb said: “Advertisers have raised concerns about being unable to choose the best services to suit their needs because of the lack of transparency and accuracy of advertising performance data provided to them by social media platforms.”

“This report builds on the ACCC’s previous work in relation to digital platforms by identifying competition and consumer harms in relation to social media services.

“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.”

The next stage of the digital platforms inquiry is another report to be provided to the Treasurer by 30 September, which will probetech giants’ “web” of servicesand their impact on consumers and competition.