In this photo illustration, the Facebook and Google logos can be seen on a smartphone in front of an Australian flag.
Pavlo Gonchar | SOPA images | LightRocket via Getty Images
Australian treasurer Josh Frydenberg told CNBC that negotiations with Facebook on the country’s new media law were “quite long and difficult” – but both sides eventually managed to resolve their differences.
The Australian Parliament last week passed a law requiring companies such as Facebook and Google to pay media outlets and publishers to link their content in news feeds or in search results.
Before the law was passed, Facebook – in retaliation against the proposed bill – blocked Australian users from viewing and sharing news content on its platform. The Australian government criticized the move, which Facebook later reversed after both sides reached an agreement.
“Well, there were challenging negotiations,” Frydenberg told CNBC’s Will Koulouris on Wednesday.
“Obviously, we at Facebook were deeply disappointed by their actions to wipe Australian news from their site … But ever since then, we’ve been calling on the phone, working through our disagreements and, I think, reaching a mutually acceptable position,” he said.
Things are moving in the right direction, although this has been quite a lengthy and difficult series of negotiations.
Josh Frydenberg
Australian Treasurer
The negotiations resulted in the Australian government making last-minute changes to the proposed law – officially known as the mandatory bargaining code for news media and digital platforms – before it was passed.
“Facebook is now negotiating in good faith with Australian news media companies,” said Frydenberg. He cited the letter of intent signed by Seven West Media, owner of broadcasting network Seven, to provide news content to Facebook.
“Things are going in the right direction, although this is quite a lengthy and difficult series of negotiations,” said the treasurer.
Facebook’s response to the media code has often been compared to Google’s response.
Google also pushed back strongly, threatening to pull its search function out of the country – but the company eventually collapsed and deals with several media outlets, including Seven West Media and the Murdoch family-owned News Corp.
Frydenberg said there is “no doubt” that other countries were watching developments regarding Australia’s new media law.
The law made Australia the first country where a government-appointed arbitrator can decide the final price that digital platforms should pay to news publishers, provided a commercial deal cannot be reached independently.
Countries like France have taken steps to make technology companies pay for news, while others, such as Canada and the UK, are considering their next steps.
– CNBC’s Saheli Roy Choudhury contributed to this report.