MercoPress. South Atlantic News Agency

Google agrees to pay Australian media news content, but Facebook blocks Aussie users

Major Australian media organization Seven West Media reached a deal earlier, its rival Nine Entertainment is reportedly close to its own pact

Google apparently has struck deals with Australian media to pay for news content, but Facebook on Thursday blocked Australian users from sharing or viewing news content on the platform.

Rupert Murdoch's News Corp. announced a wide-ranging deal with Google on Wednesday. Major Australian media organization Seven West Media reached a deal earlier, its rival Nine Entertainment is reportedly close to its own pact and Australian Broadcasting Corp. is in negotiations.

But Facebook said it “will restrict publishers and people in Australia from sharing or viewing Australian and international news content.” The dominant social network blamed Australia's proposed law for its decision, and said the law “fundamentally misunderstands the relationship between our platform and publishers who use it.”

Google is rushing to negotiate generous deals with big and small Australian media companies.

News Corp. said it would receive “significant payments” from Google in the three-year agreement, which includes heavyweight news organizations throughout the English-speaking world, such as the Wall Street Journal and New York Post in the U.S., the Times and the Sun in the U.K., and the Australian and Sky News in Australia. The deal spans audio and video and News Corp. will also get an ad revenue share from Google.

News Corp. CEO Robert Thomson thanked Australian officials in a statement, saying they “have stood firm for their country and for journalism.”

Australia's Treasurer Josh Frydenberg confirmed earlier Wednesday that state-owned Australian Broadcasting Corp. is also in negotiations and plans to spend any Google revenue on regional journalism.

“There are negotiations going on with all the major players and the minor players at the moment,” Frydenberg said. “This will help sustain public interest journalism in this country for years to come.”

Frydenberg said “none of these deals would be happening” if not for proposed legislation to create a so-called News Media Bargaining Code.

The Senate will consider the draft laws after they were passed by the House of Representatives late on Wednesday.

The code would create an arbitration panel to set a binding price for news in cases where Google and Facebook fail to reach deals with media companies whose original journalism they link to.

“Everything that I have heard from parties, both in the news media business and in terms of digital platforms, is that these are generous deals,” Frydenberg said.

“These are fair deals. These are good deals. These are good deals for the Australian media businesses,” he added

Google and Facebook, which take a combined 81% of online advertising in Australia, have condemned the code as unworkable.

Frydenberg said after weekend talks with Facebook CEO Mark Zuckerberg and Sundar Pichai, chief executive of Alphabet Inc. and its subsidiary Google, that he was convinced the platforms “do want to enter into these commercial arrangements.”

Frydenberg said he had had a “a constructive discussion” with Zuckerberg since Facebook blocked Australian news.

Communications Minister Paul Fletcher said the government would not back down on its legislative agenda because of Facebook’s reaction.

The Australian deals with Google are being negotiated under Google’s own model, News Showcase. The company has reached pay deals with more than 450 publications globally since it launched News Showcase in October.