Australia hits Big Tech where it hurts most: Algorithm control

The Australian government on Tuesday (September 8) released draft legislation that would require social media platforms to give users a choice over their default feed. Under the proposed “My Feed, My Way” rules, users could either continue with a personalised feed driven by algorithms or opt for a feed based on posts from friends and creators they have chosen to follow.

The proposal is the latest move by Australia to put limits on how digital platforms operate, following its world-first ban on social media accounts for children under 16. The government is now seeking feedback from digital platforms, industry bodies, civil society groups, and advocates before introducing the legislation in Parliament.

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For big techs like Meta (Facebook, Instagram), TikTok, and Google, however, the latest proposal hits at the heart of its business model.

Why algorithms matter so much

The endless stream of posts that users see on Instagram, Facebook, and TikTok is not simply a collection of content from accounts they follow.

Algorithms decide what appears, in what order, and how often. They use user activities such as clicks, likes, shares, searches, and watch time to predict what a user is likely to engage with and keep feeding them similar content.

That engagement is the engine of social media for real currency.

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The longer users stay on a platform, the more opportunities there are to show them advertisements. More importantly, the data generated by their activity allows platforms to build detailed profiles of users and offer advertisers highly-targeted audiences.

This is where Australia's proposal could become a problem for them.

If users choose to move away from personalised recommendations, platforms could have less behavioural data to work with and potentially fewer opportunities to keep users scrolling. A less-personalised feed could also mean less-precise advertising.

A costly change

This move also comes with a technical challenge.

The platforms would have to give Australian users a genuine choice between different feed systems and ensure that the option to switch is clearly available. This means maintaining multiple feed experiences, testing them separately, and making changes specifically to comply with Australian rules.

For companies operating at enormous global scale, the cost of re-engineering their systems for one market may not be prohibitive.

The big concern for them is what happens if other countries demand the same changes.

Domino effect

The Australian proposal could have consequences far beyond the country’s relatively small social media market. Australia has already demonstrated that it is willing to test the limits of government regulation of Big Tech.

In 2021, it introduced the News Media Bargaining Code, aimed at addressing the bargaining imbalance between major digital platforms and Australian news organisations. The law created a framework for news businesses to negotiate payment for their content with platforms such as Google and Facebook. Following its introduction, Google and Meta reached commercial agreements with a significant number of Australian news organisations.

The government’s under-16 social media restrictions have similarly attracted international support.

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The European Union already requires platforms under its Digital Services Act to provide users with certain options around personalised recommendations and profiling. Australia’s proposal could add another model for governments examining how much control users should have over algorithm-driven content.

Bigger challenge

If Australia succeeds in making platforms give users greater control over their feeds, regulators in other countries could ask why their users should not have the same choice. That could force platforms to redesign recommendation systems across multiple markets rather than maintain a separate Australian version.

For companies whose advertising businesses depend heavily on user engagement and data-driven targeting, that would be a much bigger challenge.