Social media platforms slammed for anti-competitive behaviour

Small businesses are suffering harm from Facebook, LinkedIn and other social media platforms, according to a new report from the Australian Competition & Consumer Commission (ACCC).

The report, which examined how consumers and businesses interact with social media services, found evidence of:

• Excessive data collection practices.
• Widespread scam activity.
• Lack of effective dispute resolution options.
• Lack of transparency for advertisers.
• Inadequate disclosure of sponsored content by influencers and brands.

ACCC Chair Gina Cass-Gottlieb said the consumer watchdog was concerned about the level of influence social media platforms held over users and their position as critical intermediaries for businesses to reach customers.

“Limited competition in these services can lead to poorer outcomes for consumers and small businesses,” she said

“Where there are few comparable alternatives available, consumers feel compelled to use a service because their social, family or work networks are on them. This creates a ‘take-it-or-leave-it' situation which can result in consumers accepting unwanted collection and use of their data.”

As a result, the ACCC has recommended establishing:

• A digital ombudsman.
• Mandatory processes for users to report scams and fake reviews, and social media platforms to remove them.
• Mandatory internal dispute resolution standards that include the ability to escalate to a human representative.

Ombudsman calls for reform

Australia’s Small Business and Family Enterprise Ombudsman, Bruce Billson, echoed the call for social media platforms to dramatically improve their dispute resolution processes for small business.

“We’re arguing for a policy change and for dispute resolution agency support like what we provide, to equip small and family businesses with the tools to protect themselves,” he said.

“When small businesses turn to us for assistance, our contact with the digital platforms is generally constructive and most have provided us with a direct human contact to enable these disputes to be escalated and a satisfactory outcome achieved quickly.

“However, the need for a government body to step in to resolve every small business dispute is not the answer and should be the exception.”