Facebook, Instagram and TikTok come under the ACCC’s microscope as inquiry asks how small businesses engage with social media giants

Small businesses which use social media to promote their brand have been urged to share their views with the Australian Competition and Consumer Commission (ACCC), as the watchdog investigates how tech giants like Facebook, Instagram, and TikTok engage with commercial users and consumers alike.

On Tuesday, the ACCC confirmed the sixth report issued as part of its massive Digital Platforms Inquiry will focus on established social media juggernauts, related platforms like YouTube, Reddit, and Discord, and even up-and-coming players like BeReal.

Specifically, the ACCC is interested in how those platforms provide services to their users, including the businesses which rely on Facebook groups, Instagram Stories, or TikTok accounts to reach their target audiences.

“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 in a statement.

“We hope to examine trends in user preferences and engagement over time, and consider how users choose social media services,” she added.

Interested parties can now respond to a discussion paper, which asks why users choose the platforms they frequent, and which services have become a “must have” for Australian consumers.

It also asks more granular questions focused on the small business experience: how advertising features differ between platforms, whether consumer engagement varies across social media channels, and if business users can directly compare advertising performance between platforms.

Tellingly, it also seeks feedback on the costs associated with leaving one platform to launch campaigns on another.

The sixth report comes near the half-way point of the five-year Digital Platforms Inquiry, an initiative designed to interrogate the competitive environment in which major online powerbrokers operate.

This week saw the first real-world enforcement action to arise from the inquiry, when concerns raised by the ACCC over Google’s collection and usage of consumer’s personal location data led the Federal Court to hand down $60 million in penalties to the search giant.

Inquiry to investigate how platforms share features after Instagram Reels backlash

The new discussion paper also asks for views on how social media platforms compete with each other, and how apps borrow or appropriate features from up-and-coming challengers.

“When a social media platform offers new or innovative features, competing platforms may respond by offering similar features or introducing new features to attract or retain users on their social media services,” the paper notes.

The proliferation of similar features between social media platforms made headlines in late July, when a new Instagram update prioritised its Reels short-video functionality over traditional photo posts.

In doing so, critics said Instagram was attempting to copy TikTok, an app which threatens to unsettle Facebook and Instagram’s dominance while attracting younger users turned off by older social media services.

The algorithmic change spooked many users, who successfully called on Instagram to revert the changes.

It also posed problems for business users: not only did the change suggest brands would need to retool their social media strategies towards Reels, high-profile criticism from figures like Kylie Jenner suggested potential customers could even abandon the platform entirely.

Beyond the ways social media platforms emulate features, the issue tapped into another broad aspect of the inquiry: the ways platforms share plans to tweak their algorithms, giving time for users to adapt.

Alisha Marfatia, owner of social media consultancy The Social Impact and a self-described Instagram Reels coach, says the backlash was considerable.

“Everyone was up in arms,” she told SmartCompany. “I saw posts like, ‘bring back the old Instagram, we want to make Instagram great again’.”

However, Instagram’s plan to prioritise Reels was not a surprise, Marfatia said, claiming Instagram CEO Adam Mosseri signaled the transition in videos shared through his own account.

“He does a really good job of showing up, fronting them music, and also giving an insight into what Instagram is focusing on that week,” she said.

“And if business owners want to get ahead, they can actually listen to what he says in the videos he shares.”

The push to prioritise short-form videos made sense given consumers’ shifting social media appetites, she says.

And Marfatia — whose firm trains businesses and influencers on how to optimise their Instagram content — says more advanced notice of algorithmic changes may be overkill.

“It would open them up to too much backlash, too many people and their opinions, and I think it would make it difficult, because I guess they are in business as well,” she said.

“At the end of the day you are going on a platform that is still free and we just have to update, tweak a few things at a time,” she added.

Businesses which want to share their own views on social media’s engagement with users can find the ACCC’s latest issues paper here.

The watchdog will accept submissions until September 9.