Facebook to reverse news ban in Australia after reaching an agreement with the government

Facebook and Google unlikely to be punished as long as they can demonstrate a 'significant contribution' to local journalism

Facebook will soon start restoring news pages in Australia after the government agreed to amend an upcoming media law that would require tech firms to compensate local news publishers for content that appears on their platforms.

Treasurer Josh Frydenberg and Facebook indicated on Tuesday that both parties have reached a compromise on key aspects of the law.

"Facebook has refriended Australia, and Australian news will be restored to the Facebook platform," Frydenberg told reporters in Canberra, according to Reuters.

"Facebook and Google have not hidden the fact that they know that the eyes of the world are on Australia, and that's why they have sought I think to get a code here that is workable."

Frydenberg said Facebook CEO Mark Zuckerberg had told him that the firm had now re-engaged in negotiating deals with media groups.

Will Easton, managing director of Facebook Australia, said that new amendments in proposed legislation would ensure that Facebook resumes "work to further our investment in public interest journalism, and restore news on Facebook for Australians in the coming days".

The social media giant sparked global outrage last week by announcing that it was blocking all news websites (domestic and international) on its platform in Australia, and would also restrict Australian users from sharing any news content from Australian publishers.

While implementing the ban, the company also inadvertently blocked information and government pages, including health, emergency and welfare services - a move that drew huge criticism from the news publishers, politicians and human rights advocates.

Critics described the move undemocratic, with many accusing Facebook of bullying a democratic government.

Prime Minister Scott Morrison described Facebook's decision as "arrogant" and said that he would press ahead with proposed laws to force Facebook to compensate news outlets.

Morrison added that he had also received support from several countries, including Britain, France, India and Canada.

According to Facebook and Google, the most contentious part of the draft law is the one that requires tech firms to enter mandatory arbitration with local publishers if they fail to reach an agreement within three months over the value of their content. An independent Australian mediator would then select between the payment proposal put forward by the tech firm and the proposal coming from the news outlet.

The concession deal means Facebook and Google are unlikely to be punished as long as they can demonstrate a "significant contribution" to local journalism.

According to Reuters, Australia will offer four amendments, including a change to the arbitration mechanism.

Facebook will retain "the ability to decide if news appears on Facebook" so that the company is not automatically subjected to a forced negotiation, according to Campbell Brown, Facebook Vice President of Global News Partnerships.

In January, Google also threatened to pull its search functions in Australia over the proposed media law. But, the company later softened its stance and struck deals worth millions of dollars with several media firms, including Nine Entertainment and Rupert Murdoch's News Corp.

Nine Entertainment has welcomed new amendments in the proposed law, stating that it is looking forward to resuming discussions with Facebook about a commercial deal.

"We are pleased the government has found a compromise on the digital code legislation to move Facebook back into the negotiations with Australian media organisations," a Nine spokesman said.

The company had earlier rejected all of Facebook's offers which would have voided after the media code became law.

Australia's move against Facebook and Google met the with the approval of Microsoft. The tech giant and four European press industry trade bodies put out a joint statement calling for the EU to require tech companies to pay publishers for linking to their news stories.

"...negotiations with such gatekeepers will not produce fair outcomes unless additional regulatory measures are brought forward to address gatekeepers with dominant market power," the statement says.