Josh Frydenberg locks in media code deal as Facebook caves in on news blackout

Facebook drops ban on Aussie news after Josh Frydenberg and Mark Zuckerberg talk six times in 36 hours.

Treasurer Josh Frydenberg says ‘Facebook has committed to entering into good faith negotiations with Australian news media businesses and seeking to reach agreements to pay for content’. Picture: Getty Images

Facebook has overturned its ban on Australian news content, following breakthrough discussions between Josh Frydenberg and Mark Zuckerberg that have paved the way for the tech titan to strike commercial deals with media companies.

“Facebook has refriended Australia,” the Treasurer said on Tuesday.

Mr Frydenberg spoke to Mr Zuckerberg, founder of the social media giant, six times in the 36 hours prior to Tuesday’s announcement, convincing him to overturn his company’s blackout on Australian news content, and brokering amendments to the federal government’s news media bargaining code that lured the digital platform back to the negotiating table.

“Australian news will be restored to the Facebook platform, and Facebook has committed to entering into good faith negotiations with Australian news media businesses and seeking to reach agreements to pay for content,” Mr Frydenberg said.

The Treasurer revealed that Google had also backed the four technical amendments to the media code — including a one-month warning period before a digital platform will be forced to comply with the proposed legislation — which could now be enshrined in law as early as Thursday.

On Tuesday night, Seven West Media became the first Australian media group to agree to a -commercial arrangement with Facebook. The Kerry Stokes-controlled network announced the companies had signed a letter of intent under which the digital platform will pay Seven for the use of its news content once the deal is finalised.

It’s understood that News Corp — publisher of The Australian — is pursuing a possible global deal with Facebook, similar to the deal the media company struck with Google last week, which covered some of its key US titles as well as its Australian assets. News Corp Australia executive chairman Michael Miller said the company was “in continuing conversations with Facebook, but we have not reached an agreement yet”.

Several Australian news media companies, including News Corp, Seven West Media, Nine and the Guardian Australia have announced commercial deals with Google over the past week, with the tech giant agreeing to pay for access to their news content.

News Corp Australia executive chairman Michael Miller. Picture: Getty Images

On Tuesday, Mr Frydenberg announced four technical amendments to the federal government’s mandatory news media bargaining code, with the changes addressing the key concerns of Mr Zuckerberg.

Crucially, the digital platforms will only be subject to the media code as a last resort if the tech -giants could not reach acceptable commercial deals with Australian news companies, and will be given a one-month “warning” if they are to be “designated” under the proposed law.

“The treasurer will also take into account not just the unequal bargaining position between the digital platform and the Australian news media businesses but also the commercial deals that have been put in place and that digital platform’s commitment to supporting public interest journalism in this country,” Mr Frydenberg said of the changes to the code.

“These are important issues because the purpose of the code and the purpose of the Morrison government’s intentions have been designed to sustain public-interest journalism in this country.”

The government would also now resume its advertising on Facebook, Mr Frydenberg said.

The Treasurer described Facebook’s decision to remove Australian news content from its platform last week as “regrettable”, but said it did not alter the federal government’s commitment to its “world-leading” media code.

Facebook’s managing director in Australia and New Zealand, Will Easton, said the company had reached an agreement with the Australian government and had enjoyed constructive discussions with the Treasurer and Communications Minister Paul Fletcher over the past week.

“We have consistently supported a framework that would encourage innovation and collaboration between online platforms and publisher,” he said.

“After further discussions, we are satisfied that the Australian government has agreed to a number of changes and guarantees that address our core concerns about allowing commercial deals that recognise the value our platform provides to publishers relative to the value we receive from them.

“As a result of these changes, we can now work to further our investment in public interest journalism and restore news on Facebook for Australians in the coming days.”

Despite the changes, Mr Frydenberg insisted that the code’s “key measures” remained in place. “Namely it is a mandatory code,” he said. “A world-leading code. Secondly, it is based on two way value exchange, and third, it involves a final offer arbitration mechanism.

The agreement between Facebook and the Australian government is likely to prompt other countries to seek similar regulatory deals with the social media giant. Angela Mills Wade, executive director of the European Publishers Council, said: “The latest twist proves that regulation works. The government has held its nerve in the face of a threat to democratic law making from a market dominant player and brought them back into frame.

“In effect, Facebook has found a face-saving way back in, while the government maintained the core tenets of its groundbreaking legislation.”

Labor has backed the government’s amendments to the media bargaining code, assuring its passage through parliament. The government is likely to put the amendments to the Senate on Wednesday. If the amended bill passes, it will return to the House for final approval, most likely on Thursday.

Additional reporting: David Swan