Sites like X and TikTok have become centres of controversy as their role in several violent Australian events has come into question, and the federal government will create a committee to investigate content people are exposed to online.
Communications Minister Michelle Rowland says the joint standing committee is set to examine algorithms on social media platforms and how they determine what users see, as well as their impact on mental health.
"Social media has a civic responsibility to its Australian users and to our society more broadly," she told ABC radio on Friday.
"The decisions that have been made by social media platforms in recent months ... can really demonstrate the wide ranging negative impacts not only on our economy, but also on our democratic institutions."
"Parliament needs to understand how social media companies dial up and down the content that supports healthy democracies, as well as the anti-social content that undermines public safety."
Harmful content online such as extremist material and scams will be at the centre of the inquiry.
The decision of Facebook's parent company Meta to abandon deals with media companies to support public interest journalism will also be in focus.
"What is at stake here is the sustainability of the information ecosystem," Ms Rowland said.
"Australians rely, and our democracy relies, on news that is trustworthy, that is informative, and that is available.
"Meta's decision to withdraw from news actually threatens (this)."
An inquiry will look at Facebook parent company Meta's move to abandon deals with media companies. (Lukas Coch/AAP PHOTOS)
The committee's formation comes as the federal government has been at loggerheads with social media giants over the removal of violent content online following the stabbing of a church leader in Sydney in April.
Platforms such as X refused to comply with take-down requests from the internet safety watchdog after the stabbing.
The government is expected to consult MPs and senators on the terms of reference for the committee, with a referral setting up the inquiry to be made in the next week.
Meanwhile, the opposition has urged government to include social media sites as it considers a trial of age verification technology.
"Social media use can be immensely damaging for Australian children," opposition communications spokesman David Coleman said.
"We must take action now to limit the access of children to platforms like Instagram and TikTok."
