Facebook ban on Australian news ends

Federal government makes changes to the News Media Bargaining Code, which the social media giant is happy enough with.

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Facebook Inc (NASDAQ: FB) will reverse its days-long ban on Australian users viewing and sharing news content.

“The government has been advised by Facebook that it intends to restore Australian news pages in the coming days,” said federal treasurer Josh Frydenberg and communications minister Paul Fletcher in a joint statement on Tuesday afternoon.

The social media giant last Thursday blocked all Australians from viewing and sharing news articles, and prohibited Australian media companies from making new posts.

The unprecedented move was in retaliation to Australia’s world-first News Media Bargaining Code. That new law attempts to force digital platforms like Facebook and Alphabet Inc (NASDAQ: GOOG) (NASDAQ: GOOGL)’s Google to pay publishers for content.

But after days of negotiations, it seems the government has made some amendments to the proposed law that’s appeased Facebook.

Facebook confirmed that news would return to Australia in “the coming days”.

“We have come to an agreement that will allow us to support the publishers we choose to, including small and local publishers,” said Facebook Global News Partnerships vice president Campbell Brown.

“Going forward, the government has clarified we will retain the ability to decide if news appears on Facebook so that we won’t automatically be subject to a forced negotiation.”

What was changed in the media code?

The ministers stated that the latest changes would “provide further clarity to digital platforms and news media businesses about the way the code is intended to operate”.

The introduction of a 2-month negotiation period for media companies and digital platforms to work out a revenue-sharing agreement is one of the changes made to the code. Once that period expires, a compulsory arbitration will take place.

Facebook also won a 1-month notice period for the government to designate a digital platform as a participant of the code.

And designation will also take into account if that platform has already made deals with Australian news publishers.

Google, after threatening to also pull its services out of Australia, has now struck deals with publishers News Corporation (ASX: NWS) and Nine Entertainment Co Holdings Ltd (ASX: NEC).

It’s not clear yet whether Facebook will now resume plans for an Australian version of its Facebook News module.

“The amendments will strengthen the hand of regional and small publishers in obtaining appropriate remuneration for the use of their content by the digital platforms,” stated the ministers.

When announcing the news blackout last week, Facebook had claimed the Australian Government was insensitive to how it operates.

“The proposed law fundamentally misunderstands the relationship between our platform and publishers who use it to share news content,” said Facebook ANZ managing director William Easton.

“Google Search is inextricably intertwined with news and publishers do not voluntarily provide their content. On the other hand, publishers willingly choose to post news on Facebook, as it allows them to sell more subscriptions, grow their audiences and increase advertising revenue.”

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Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Randi Zuckerberg, a former director of market development and spokeswoman for Facebook and sister to its CEO, Mark Zuckerberg, is a member of The Motley Fool's board of directors. Tony Yoo owns shares of Alphabet (A shares). The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of and recommends Alphabet (A shares), Alphabet (C shares), and Facebook. The Motley Fool Australia has recommended Alphabet (A shares), Alphabet (C shares), and Facebook. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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