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Facebook : Reaches Deal With Australia to Restore News -- 2nd Update

02/23/2021 | 04:09am EDT

By Mike Cherney

Facebook Inc. reached a deal with the Australian government to restore news pages to the social media company's platform, following a five-day hiatus because of a disagreement over payment for content.

Facebook removed news from its platform in Australia last week, as legislation that would effectively require Facebook and Alphabet Inc.'s Google to pay traditional media companies for content worked its way through the country's parliament. The legislation is being widely watched globally and could offer a model for other countries to compel tech giants to pay for content.

Facebook got some changes to the legislation as part of the deal. That includes requiring an additional round of negotiation with media companies before binding arbitration kicks in, as well as more acknowledgment of any deals Facebook reaches with publishers on its own, a government statement and government officials said Tuesday. In return, Facebook planned to restore news pages to its platform in Australia in the coming days, the statement said.

In a news conference, Australian Treasurer Josh Frydenberg said Facebook Chief Executive Mark Zuckerberg told him that the company intends to strike commercial deals with Australian media organizations to pay for content. It did that later Tuesday, when Australian television and newspaper company Seven West Media Ltd. said it agreed to provide news to Facebook, though it didn't immediately provide any details of the deal.

"There's no doubt that Australia has been a proxy battle for the world," Mr. Frydenberg said Tuesday. "Facebook and Google have not hidden the fact that they know that the eyes of the world are on Australia."

Facebook said Tuesday that it is satisfied that the changes to the legislation address its main concerns, including that previous versions didn't fully recognize the value Facebook provides to news publishers by sending traffic to their websites. Campbell Brown, the vice president of global news partnerships at Facebook, said the Australian government clarified that Facebook would retain the ability to decide whether news appears on its platform.

"It's always been our intention to support journalism in Australia and around the world," she said. "We'll continue to invest in news globally and resist efforts by media conglomerates to advance regulatory frameworks that do not take account of the true value exchange between publishers and platforms like Facebook."

Both Google and Facebook have in the past been willing to pay for news in certain contexts. Google, which initially opposed the legislation and had threatened to shut down its search engine in Australia, also recently agreed to new deals to pay some publishers for content, including News Corp, owner of The Wall Street Journal publisher Dow Jones & Co.

A spokesman for News Corp's Australia subsidiary declined to comment on the new Facebook deal. Google also declined to comment.

Nine Entertainment Co., the publisher of the Sydney Morning Herald, said it is pleased that the government and Facebook found a compromise that will bring the tech giant back to the negotiating table.

"We look forward to constructive discussions resuming," a Nine spokesperson said.

Facebook's removal of news from its platform caused an uproar in Australia, including from consumers. Some digital-media experts said Facebook's move, without any immediate advance notice, underscored the power it holds over the information that users receive.

Pages belonging to some government agencies and community groups--such as the country's weather service, local health agencies and even domestic-violence hotlines--were initially taken down, too. Facebook later said that was inadvertent but that it targeted an array of content because the definition of news in the legislation was broad.

There are signs that Facebook's response in Australia is giving a push to new regulatory efforts overseas. Lawmakers in the U.S. and U.K. criticized the news ban. In Canada, one minister said his government would move forward on similar legislation. In Europe on Monday, news publishers and Microsoft Corp., which had previously said it supported the Australian legislation, called for a mechanism similar to the Australian legislation to be enacted there.

In Australia, the legislation would require tech companies and news publishers to submit to binding arbitration if a deal can't be reached on payment for content. Among the changes announced Tuesday is a mediation process that would occur before final arbitration.

The legislation also requires the Australian treasurer to designate which tech companies the new regulations would apply to. The changes include requiring the treasurer, when deciding whether to make a designation, to take into account whether a tech company has contributed to the Australian news industry through commercial agreements.

Australian officials have previously said that the purpose of the new regulations is to encourage the tech companies and media outlets to strike deals on their own, following complaints from media companies that the digital platforms had so much market power that there was no incentive for them to negotiate. Mr. Frydenberg has pointed to Google's recent deals with media companies as evidence the new regulations are working even before being passed into law.

Facebook previously said the proposed law misunderstands the relationship between publishers and tech companies, and that it had little choice but to restrict news sharing rather than accept a law that ignores reality. Other business groups and some computer scientists have also raised concerns about the law.

Write to Mike Cherney at mike.cherney@wsj.com

(END) Dow Jones Newswires

02-23-21 0409ET

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