The inquiry into the government's contentious proposed Digital Duty of Care laws on Monday heard testimonies from parents, experts and stakeholder organisations.
Under the draft legislation, online services and platforms would be required to adhere to a set of safety standards, putting the onus of protection and harm reduction on technology companies.
Chanel Contos, founder and chief executive of sexual violence prevention organisation Teach Us Consent, said she supported the bill, citing an "urgent need to regulate big tech and make online spaces safer".
"The legislation does not control what people can or can't post online. The only thing this bill does to individuals is to give them more choice," Ms Contos said, calling for stronger enforcement, user choice and meaningful penalties.
"The success of this bill hinges on its enforcement."
On September 8, the government committed to Teach Us Consent's Fix Our Feeds campaign, which will give social media users the choice to opt in to their algorithm.
Ms Contos said she supported amendments that would see fines tied to a percentage of a company's global revenue, and a private right of action that would give individuals the right to sue tech companies and seek compensation.
However, Heads Up Alliance founder Dany Elachi told the inquiry that while he strongly supported the online protection of young people, he rejected the government's "nebulous" bill, accusing it of being marked by the "fingerprints of illiberalism".
He said the bill tied child protection with adults' online free speech, which "ought to be two separate issues".
"It shouldn't be a two-for-one deal," Mr Elachi said, adding it undermined democracy.
"Instead of a law that focuses on keeping children safe, this law is overshadowed by a breadth that has the potential to be weaponised to restrict adult speech and silence political dissent."
He urged the Greens, who hold the balance of power in the Senate, not to give in to the temptation of censoring political opponents.
Communications Minister Anika Wells defended the government's work on the bill as courageous, saying it would create a better environment for the next generation of Australian children.
"It's about embedding some basic safety standards and saying to big tech: if you build it, you are responsible for its risks," she told ABC News.
Also giving evidence was Mia Bannister, whose 14-year-old child, Ollie Hughes, died by suicide in 2014 after experiencing bullying and harmful content online.
"His experiences exposed me to the complex and interconnected pressures young people can face, both offline and online, and to the limitations of systems that too often respond only after significant harm has occurred," she wrote in a submission to the inquiry.
Ms Bannister, supporting the bill, argued a preventive approach was necessary for protecting children like her son.
Many conservative politicians and groups have labelled the plan as censorship, saying sweeping powers given to the minister, which have been partially rolled back from when they were first announced, could stop people expressing themselves freely online.
It would also allow the eSafety commissioner to collect private information about Australians and share it with other bodies, the Institute of Public Affairs has claimed.
An open letter from think tank the Australia Institute to the communications minister has called for the government to significantly strengthen the bill.
The letter, signed by more than 80 organisations including Teach Us Consent, has asked for protections against hate speech, private right of action, and substantial penalties for social media companies that break the law.