In this photo illustration, the Facebook and Google logos are seen on a smartphone in front of an Australian flag.
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Australian treasurer Josh Frydenberg told CNBC that negotiations with Facebook over the country’s new media law were “very time-consuming and difficult” – but both sides have finally managed to resolve their differences.
The Australian parliament last week passed a law requiring companies like Facebook and Google to pay media and publishers to link their content to news feeds or search results.
Before the law was passed, Facebook – in retaliation for the proposed bill – prevented Australian users from seeing and sharing news on its platform. The Australian government criticized the move, which Facebook later reversed after the two sides reached an agreement.
“Well, there were challenging negotiations,” Frydenberg told CNBC’s Will Koulouris on Wednesday.
“Obviously, with Facebook, we were deeply disappointed in his actions of sweeping Australian news from his website … But since then, we got on the phone, resolved our differences and reached, I think, a mutually acceptable position,” he said.
Things are moving in the right direction, although this has been a very lengthy and difficult set of negotiations.
Josh Frydenberg
Australian Treasurer
The negotiations resulted in the Australian government introducing last-minute changes to the proposed law – officially known as the Mandatory Trading Code for News Media and Digital Platforms – before it was passed.
“Facebook is now entering into good faith negotiations with Australian news media companies,” said Frydenberg. He cited the letter of intent signed by Seven West Media, which owns the Seven broadcast network, to provide news content to Facebook.
“Things are moving in the right direction, although this has been a very lengthy and difficult set of negotiations,” said the Treasurer.
Facebook’s response to the media code has often been compared to Google’s reaction.
Google also backed off strongly and threatened to pull its search function out of the country – but the company ended up ceded and entered into agreements with several media outlets, including Seven West Media and News Corp.
Frydenberg said “there is no doubt” that other countries are watching developments related to Australia’s new media law.
The passing of the law made Australia the first country where a government-appointed arbitrator can decide on the final price digital platforms should pay news publishers, as long as a trade agreement cannot be reached independently.
Countries like France have taken steps to make technology companies pay for the news, while others, like Canada and the United Kingdom, are contemplating the next steps.
– CNBC’s Saheli Roy Choudhury contributed to this report.