Facebook "demoted" thousands of posts during the federal election to reduce the prominence of false warnings that Labor would introduce an inheritance tax, and in two instances blocked mass networks of groups and people who were misleading voters.

A death tax meme that went viral on Facebook. Facebook

The social media giant revealed fresh details on election misinformation in a submission to a federal Parliament inquiry into the 2019 election and also defended its handling of the rampant inheritance tax falsehood.

But Labor issued a warning about the impact of social media on the election outcome, using its submission to call for a "thorough examination" of the digital platforms and focus on the way "malinformation" could influence voters.

Labor also called for reforms to ensure elections were protected from interference from "home and abroad", a real-time donation disclosure scheme and limits to the level of campaign expenditure through spending caps.

Facebook posts about Labor introducing a 40 per cent death tax were shared tens of thousands of times during the election campaign. Abetted by Liberal Party advertisements and several viral individual posts with more than 10,000 shares each, it grew into one of the most discussed topics online by election eve.

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"Most of the discussions about inheritance taxes on our platform during the federal election came from ordinary Australians expressing their personal opinions or from elected politicians or political parties," the Facebook submission reads.

"Facebook does not believe that it's an appropriate role for us to be the arbiter of truth over content shared by ordinary Australians or to referee political debates and prevent a politician's speech from reaching its audience and being subject to public debate and scrutiny."

The social network also revealed it removed two instances of "coordinated inauthentic behaviour" - groups of pages or people who coordinated to mislead others - during the campaign. It did not say what those two instances were.

The figures for Australia were extraordinarily low compared to trends overseas, with Facebook removing 2,632 pages, groups and accounts in March this year for "coordinated inauthentic behaviour" connected to Iran, Russia, Macedonia and Kosovo.

Labor has called on federal Parliament to explore the impact of digital platforms on democracy, "and to pay particular regard to the proposition that Australian elections are vulnerable to influence by 'malinformation'", the party said in its submission to the same inquiry.

The inquiry, run by the Joint Senate Committee on Electoral Matters, is examining the May federal election.

Facebook partnered with the Agence France-Presse during the election campaign to provide a fact-checking service, where posts found to be false would be significantly demoted on the site's newsfeed.

Facebook's submission revealed 17 posts were fact-checked during the campaign.

"The media commentary [regarding the inheritance tax] incorrectly suggested that Facebook does not take action against misinformation on our platform," it said.

"Where the inheritance tax discussion related to content that had been fact checked as false by

our third party fact checkers, thousands of posts were subsequently demoted in News Feed

(resulting in less distribution).

The company also said the spread of misinformation was a "highly adversarial space" and it could not catch everything but was making progress.

Facebook said it acted against "foreign interference" in the Australian campaign by halting advertisements from outside the country.

"The restriction took effect the day after the election was called and applied to ads we determined to be coming from foreign entities that were of an electoral nature, meaning they contained references to politicians, parties or election suppression.

"As part of this ban, we did not allow foreign ads that include political slogans and party logos."

Twitter reported its global action against fake accounts during the period of the Australian election but played down any problems in Australia.

"Between January to May 2019, our internal, proactive tools challenged 81,747,056 accounts globally for engaging in suspected spammy behaviour, including those engaging in suspected platform

manipulation," it told the parliamentary committee.

The company added six government organisations and political parties to its "Partner Support Portal" to give them special status to report quickly on violations of Twitter rules, but said "no reports were made" throughout the election period.

The Australian Competition and Consumer Commission's digital platform review defined malinformation as "information deliberately spread by bad faith actors to inflict harm on a person, social group, organisation or country, particularly where this interferes with democratic processes."

With David Crowe and Rob Harris