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Facebook Ends Australia News Blackout After Law Compromise

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Angus Whitley
·3 min read
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(Bloomberg) -- Facebook Inc. backed down from its news blackout in Australia after the government agreed to amend world-first legislation forcing the tech giant and Google to pay local publishers for content.

The social-media platform switched off news sharing in Australia last week in opposition to the proposed law, and Mark Zuckerberg and government officials have been locked in talks to find a compromise.

Among key concessions, the government said Tuesday it would take into account commercial deals Google and Facebook reach with news companies before deciding whether they are subject to the law, and would also give them one month’s notice. The platforms also won more time to strike deals with publishers before they’re forced into final-offer arbitration as a last resort.

The legislation, which is expected to pass parliament this week, has made Australia a testing ground for digital-platform regulation as jurisdictions worldwide rein in the Silicon Valley juggernauts.

Australian Treasurer Josh Frydenberg said Tuesday that Facebook had now re-engaged with news publishers and was seeking to reach commercial deals. Hours after the agreement was unfurled, Australia’s Seven West Media Ltd. disclosed separately it had signed a letter of intent to provide content to Facebook, without elaborating on financial arrangements.

“There is no doubt that Australia has been a proxy battle for the world,” Frydenberg said. “So many other countries are looking at what is happening here in Australia.”

Facebook said the restrictions on sharing news will be lifted “in the coming days.”

“We are satisfied that the Australian government has agreed to a number of changes and guarantees that address our core concerns,” William Easton, managing director for Facebook Australia & New Zealand, said in a statement.

In blocking news sharing, Facebook switched off the main news source for almost one in five Australians. It also disabled -- accidentally, the company said -- a raft of government Facebook pages carrying public health advice on the coronavirus, warnings from the weather bureau and even the site of a children’s hospital.

The abrupt move drew international scrutiny at a time global regulators are already ramping up efforts to curtail the growing influence of Facebook and other tech titans.

Australian Prime Minister Scott Morrison said last week he’s fielded queries from several world leaders about the Facebook clash, including Indian Prime Minister Narendra Modi, Canadian leader Justin Trudeau, French President Emmanuel Macron and the U.K.’s Boris Johnson.

“It seems very sensible of Facebook to retreat as this could have potentially been very damaging to its brand,” said Nicole Bridges, a lecturer in public relations at Western Sydney University.

Like Facebook, Alphabet Inc.-owned Google has also negotiated hard with the government and last year said it would shut down its search engine in Australia if the law was enacted. That stance appears to have softened, and in recent days Google has independently struck deals to pay Australian publishers including News Corp. for news, rather than be forced into arbitration.

Some viewed the arrangement in Australia as a victory for Facebook, which demonstrated its value to publishers struggling to grow traffic.

“Facebook’s action clearly demonstrates the value that it provides to the news sites and this will feature heavily in those ‘good faith negotiations’,” said Richard Windsor, a former Nomura telecom analyst and founder of independent researcher Radio Free Mobile.

(Updates with new deal, analyst’s and Morrison’s comments from the fourth paragraph)

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