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Source: Australian Competition and Consumer Commission

Australians are increasingly turning to online private messaging services to keep in touch with each other, and are overwhelmingly choosing services provided by Facebook and Apple.

The ACCC’s first Digital Platform Services Inquiry interim report, released today, shows how the use of online private messaging services has grown significantly during the COVID-19 pandemic, as workplaces and schools moved to remote access and people sought alternatives to face-to-face communication.

The report examines the use of online private messaging services in Australia, updates previous ACCC findings on social media and search services and identifies competition and consumer issues across digital platforms.

Facebook Messenger had an estimated 14.7 million monthly active users in Australia in June 2020, while Facebook-owned WhatsApp had an estimated 8 million monthly active users.[1]

Apple enables its iMessage service by default through its Messages app which, along with FaceTime, is pre-installed on iPhones, and may be used on other Apple devices. Approximately half of the mobile operating systems used in Australia are Apple iOS. 

“Australians have embraced the use of online private messaging apps, especially during the COVID-19 pandemic. Many Australian consumers use a range of messaging services during the day,” ACCC Chair Rod Sims said.

“Consumers commonly choose to use the biggest providers in part because their friends, family, colleagues and acquaintances are also more likely to use them, and because most online messaging services don’t allow consumers to send or receive messages to users of different services.”

“This means the big players have a significant competitive advantage over small entrants,” Mr Sims said. 

Research conducted and commissioned by the ACCC for the report shows that many digital platforms, including online private messaging providers and suppliers of advertising services, are able to extensively track users’ activities online and on mobile apps through the use of cookies, software development kits and other technologies.

Large platforms and advertising service providers are able to receive a range of user information from Android apps, AppCensus research commissioned by the ACCC shows.

The ACCC also examined the terms and policies of online private messaging services, and found most included broad statements allowing for the collection of extensive information about users, but provide little clarity about how a user’s data would be collected, used, or shared with others.

In addition, the ACCC considered that emerging technologies, such as voice activated devices and augmented and virtual reality services, will likely provide the platforms with even greater ability to collect data on consumers.

“As large platforms continue to collect vast amounts of consumer information, they are also expanding into new sectors, growing their ‘ecosystems’ and with it, their market power and ability to draw in, and lock in, consumers,” Mr Sims said.

“These expanded services can deliver benefits to consumers, but the impacts on competition and consumer choice need to be closely monitored and considered.”

The ACCC remains concerned about scam activity on digital platforms including on messaging services, finding that reports of scams on platforms have been increasing and a number relate to known celebrity scams or lotto frauds, some of which have been continuing in a similar form for many years.

Separately, ACCC research found that consumers using Google Search on a mobile device are more likely to be shown an advertisement as the first item than when using Google Search on desktops and laptops for some retail product searches. Given almost half of all visits to Google Search are now from mobile devices, this difference in display is significant, impacting consumers’ ability to find information that best suits their needs, and the options that small businesses have to reach customers online.

The ACCC also found that terms in standard agreements between platforms and businesses, which were seeking to advertise on those platforms often left small businesses at a significant disadvantage and could be unfair. For example, some of these terms gave platforms broad discretion to remove content, suspend or terminate accounts, and vary terms without notice.

“We continue to advocate for effective dispute resolution mechanisms to address complaints and disputes between platforms and businesses. This would also benefit consumers who fall victim to scammers using social media or messaging services,” Mr Sims said

“We also continue to advocate for a prohibition of unfair contract terms (with penalties applying to their use) and a prohibition of certain unfair trading practices.”

The ACCC will continue to monitor platforms and the issues identified over the five year term of the Digital Platforms Services Inquiry, and will also continue to work closely with international competition and consumer agencies to address competition and consumer concerns regarding digital platforms.

The report is available at Digital Platforms Services Inquiry – September 2020 interim report.

Background

In February 2020 the Government announced that the ACCC would have a role for five years to monitor digital platform services and their impacts on competition and consumers.

As part of this role the ACCC is to provide the Australian government with six-monthly reports on digital platform services. This is the first of these six monthly reports.

Online private messaging describes  services that enable users to communicate privately with friends, family members, colleagues and other contacts, one-to-one and/or with a group in real-time and in various forms such as text, voice or video.

The ACCC’s second report will be on app marketplaces; the ACCC is continuing to conduct its Digital Advertising Services Inquiry, with an interim report to be provided to the Treasurer by 31 December 2020.

[1]       Nielsen Digital Content Ratings, Monthly Total, June 2020, P13+, PC, Smartphone, Tablet, Unique Audience.

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