Google to pay Murdoch's News Corporation for stories

Facebook restricts users in Australia from sharing or viewing news links in response to proposed legislation

In a new twist, Google has signed a new deal with Australia's Seven West Media Ltd. Ths was announced by Seven West in an earnings announcement on Monday.

As part of the agreement, the companies will develop a subscription platform and will share advertising revenue through Google's ad technology services. The deal includes the development of audio journalism and "meaningful investments in innovative video journalism by YouTube", according to News Corp.

But Facebook says this "fundamentally misunderstands the relationship between our platform and publishers".

William Easton, managing director at Facebook Australia & New Zealand, wrote on the company's website on Wednesday: "In response to Australia's proposed new Media Bargaining law, Facebook will restrict publishers and people in Australia from sharing or viewing Australian and worldwide news content".

Facebook Australia and New Zealand managing director William Easton released a statement on the move overnight.

In doing so, it has split from rivals News Corp and Nine Entertainment Co Holdings Ltd which have failed to reach agreements with Google and instead backed the legislation which calls for an arbiter to set content fees in the absence of a private deal.

Facebook has opted to not pay, noting in the blog post that "the business gain from news is minimal" and that news composed "less than 4% of the content" people see in their news feeds.

Facebook defended the move in a lengthy statement.

But Facebook said it "will restrict publishers and people in Australia from sharing or viewing Australian and global news content".

"Despite key issues such as the COVID-19 pandemic having ongoing effects on all Australians, Facebook has today removed important and credible news and information sources from its Australian platform".

Media giant News Corp has already announced it has struck a deal for Google to pay it for news.

While they have both collectively earmarked billions to help publishers worldwide adapt to the new digital landscape, Facebook has tried to pull back from serving up news content to its users, in part because of the polarization around the recent USA election in which online content, often from media organizations, may have inflamed tensions.

Australia's Seven West Media Ltd became the country's first major news outlet to strike a licensing deal with Google, as the government pushes ahead with a law that would force the internet giant to pay media companies for content.

"I've had numerous conversations with Australia [and] the Australian regulator that would be responsible [for] the media portion of the conversation", Mr. Guilbeault said.

The laws, if passed, could compel Facebook and Google to pay Australian news outlets for the journalism they produce.

"From finding new readers to getting new subscribers and driving revenue, news organisations wouldn't use Facebook if it didn't help their bottom lines".

"Contrary to what some have suggested, Facebook does not steal news content. Publishers choose to share their stories on Facebook".

Separately, a hedge fund is taking control of the company that owns the Chicago Tribune, New York Daily News and other newspapers, stoking fears over more job cuts.

And worldwide audiences "cannot view or share Australian news content on Facebook or content from Australian news pages".

This should discourage both the platforms and media businesses from making unrealistic demands.

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