* Facebook had blocked Australian users from viewing newscontent
* The negotiations have been watched internationally
* Legislation to address a power imbalance duringnegotiations
* Google previously threatened to withdraw its search engine(Adds analyst comments)
By Byron Kaye and Colin Packham
CANBERRA, Feb 23 (Reuters) – Facebook said on Tuesdayit will restore Australian news pages after negotiating changeswith the government to a proposed law that forces tech giants topay for media content displayed on their platforms.
Australia and the social media group have been locked in astandoff for more than a week after the government introducedlegislation that challenged Facebook and Alphabet Inc’sGoogle’s dominance in the news content market.
Facebook last week blocked Australian users from sharing andviewing news content on its popular social media platform,drawing criticism from publishers and thegovernment.
But after a series of talks between Treasurer JoshFrydenberg and Facebook CEO Mark Zuckerberg, a concession dealhas been struck, with Australian news expected to return to thesocial media site in coming days.
The issue has been widely watched internationally as othercountries including Canada and Britain consider similarlegislation.
“Facebook has refriended Australia, and Australian news willbe restored to the Facebook platform,” Frydenberg told reportersin Canberra on Tuesday.
Frydenberg said Australia had been a “proxy battle for theworld” as other jurisdictions engage with tech companies over arange of issues around news and content.
While Big Tech and media outlets have battled over the rightto news content in other jurisdictions, Australia’s proposedlaws are the most expansive and seen as a possible template forother nations.
“Facebook and Google have not hidden the fact that they knowthat the eyes of the world are on Australia, and that’s why theyhave sought I think to get a code here that is workable,”Frydenberg said.
Australia will offer four amendments, which include a changeto the proposed mandatory arbitration mechanism used when thetech giants cannot reach a deal with publishers over fairpayment for displaying news content.
Facebook said it was satisfied with the revisions, whichwill need to be implemented in legislation currently before theparliament.
“Going forward, the government has clarified we will retainthe ability to decide if news appears on Facebook so that wewon’t automatically be subject to a forced negotiation,”Facebook Vice President of Global News Partnerships CampbellBrown said in a statement online.
She said the company would continue to invest in newsglobally but also “resist efforts by media conglomerates toadvance regulatory frameworks that do not take account of thetrue value exchange between publishers and platforms likeFacebook.”
The government had up until Monday maintained it would notchange the legislation.
Analysts said while the concessions marked some progress fortech platforms, the government and the media, there remainedmany uncertainties about how the law would work.
The amendments include an additional two-month mediationperiod before the government-appointed arbitrator intervenes,giving the parties more time to reach a private deal.
It also inserts a rule that an internet company’s existingmedia deals be taken into account before the rules take effect,a measure that Frydenberg said would encourage internetcompanies to strike deals with smaller outlets.
The so-called Media Bargaining Code has been designed by thegovernment and competition regulator to address a powerimbalance between the social media giants and publishers whennegotiating payment for news content used on the tech firms’sites.
Media companies have argued that they should be compensatedfor the links that drive audiences, and advertising dollars, tothe internet companies’ platforms.
A spokesman for Australian publisher and broadcaster NineEntertainment Co Ltd welcomed the government’scompromise, which it said moved “Facebook back into thenegotiations with Australian media organisations.”
Major television broadcaster and newspaper publisher SevenWest Media Ltd said it had signed a letter of intent tostrike a content supply deal with Facebook within 60 days.
A representative of News Corp, which has a majorpresence in Australia’s news industry and last week announced aglobal licencing deal with Google, was not immediately availablefor comment.
The proposed code will apply to Facebook and Google,although the competition regulator, which advised government onthe legislation, has said it’s likely other tech firms will beadded.
Tama Leaver, professor of internet studies at Australia’sCurtin University, said Facebook’s negotiating tactics haddented its reputation, although it was too early to say how theproposed law would work.
“The law itself remains untested. It’s like a gun that sitsin the Treasurer’s desk that hasn’t been used or tested,” saidLeaver.
Frydenberg said Google had welcomed the changes. A Googlespokesman declined to comment on Reuters’ queries.
Google also previously threatened to withdraw its searchengine from Australia but later struck a series of deals withpublishers.
Australian Competition and Consumer Commission chair RodSims, the main architect of the law, declined to comment.
The government will introduce the amendments to Australia’sparliament on Tuesday, Frydenberg said. The country’s two housesof parliament will need to approve the amended proposal beforeit becomes law.
(Reporting by Colin Packham and Byron Kaye; additionalreporting by Renju Jose; Writing by Jonathan Barrett; Editing bySam Holmes)