(Pocket-lint) - Last week Facebook announced it would restrict Australian users from viewing or sharing news. The social network came to this decision due to a proposed law in the country that aims to require Facebook to pay news publishers for content. However, the situation has been resolved after a climbdown from the Australian Government. 

Here's what you need to know.

What happened

  • Facebook responded to potential regulation by blocking news in Australia
  • Google made a different decision in response to the proposed law in Australia
  • Now Facebook and the Australian Government have compromised. 

Last week Facebook prevented Australian users from accessing news on Facebook, and it blocked Australian Facebook Pages from sharing news. Facebook blameed Australia’s News Media Bargaining Code, a controversial piece of legislation, for its decision to block news in the country.  

Basically, news outlets say they should be compensated for articles shown on online platforms such as Facebook and Google. Under Australia's proposed law, news outlets could bargain with Facebook and Google for compensation for news content shown on their platforms. A FAQ about the legislation notes the code was created to "address a bargaining power imbalance" between Australian news outlets and online platforms.

On 17 February 2021, in response to the pending law, Google struck a deal with Rupert Murdoch's News Corp, ensuring it could show news from that organisation in Australia. Facebook, however, has decided to prevent Australians from sharing news links around the world. Keep in mind Facebook's decision comes amid rising tensions between social media giants and governments trying to regulate the tech industry.

On 23 February 2021, Facebook announced it had had positive discussions with the Australian Government. As part of the agreement and amendments to the legislation, Facebook will have to demonstrate a contribution to local journalism, but it's clear that the Australian Government has had to compromise.

Australian Treasurer Josh Frydenberg had held talks with Facebook's Mark Zuckerberg and managing director of Facebook Australis William Easton over the last week, the result of which is that the ban will end "in the coming days". 

Facebooksubsequently issued the following statementfrom Campbell Brown, head of Global News Partnerships at Facebook: "After further discussions with the Australian government, we have come to an agreement that will allow us to support the publishers we choose to, including small and local publishers.

"We’re restoring news on Facebook in Australia in the coming days. 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.

"It’s always been our intention to support journalism in Australia and around the world, and 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."

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Why did Facebook block news?

  • Facebook says 4 per cent of users in Australia see news in their feed
  • It argues users and publishers willingly share news on Facebook
  • It claims 'value exchange' with publishers is not in its favour

Facebook said it made a different decision than Google because displaying news on its platform has "minimal" benefits. It claimed news makes up less than 4 per cent of the content users see in their news feed. However, according to a 2020 report by the News and Media Research Centre at the University of Canberra in Australia, approximately 39 per cent of Australians use Facebook to read news.

Facebook is also arguing it is different from Google because users and publishers choose to post news on Facebook. Here's how William Easton, managing director of Facebook Australia and New Zealand, explained the social network's take in a 17 February 2021 blog post:

"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. In fact, and as we have made clear to the Australian government for many months, the value exchange between Facebook and publishers runs in favor of the publishers."

Needless to say, Facebook's decision drew criticism from across the world, including from Australian news outlets and politicians. Australian Prime Minister Scott Morrison said in a Facebook post that the social network's actions were as "arrogant as they were disappointing".

The unseemly episode has certainly had a detrimental effect on Facebook's reputation in Australia and beyond.

Writing by Maggie Tillman. Editing by Dan Grabham.