Under the mandatory code of conduct, technology giants Google and Facebook would be required to negotiate with Australian media companies over payment for news content and notify them of algorithm changes.
The deal could be seen as a blow to Microsoft who is gearing up to project its Bing search as a replacement for Google search engine if the leading search giant decides to pull out of Australia.
Now, not so much.
Google will also pay newsmakers like The Wall Street Journal, Barron's, MarketWatch, and The New York Post, and it has separately reached a deal with France.
Facebook has announced that it will no longer allow news from Australian publishers to be shared on its site, and users in Australia will be blocked from sharing or viewing Australian and worldwide news content.
Google and Facebook have freely distributed news stories despite a steep decline in the publishing industry, which has been ravaged by a loss of advertising dollars that instead have gone to Google, Facebook and other online sites.
Facebook has taken the nuclear option in its dispute over new Australian media laws, banning news content from its service entirely rather than be forced to pay for it.
"News Showcase now has partnerships with over 500 publications around the world, demonstrating the value this product can bring to our news partners and readers everywhere", Google President of Global Partnerships Don Harrison said in an emailed statement.
The tech giants on Wednesday took opposing sides to upcoming rules in Australia that would force both companies to pay local publishers whenever their content appears on these digital platforms.
The diverging decisions by Google and Facebook on how to handle the upcoming Australian rules may highlight the different priorities for each company.
The conservative government hopes to enact the so-called News Media Bargaining Code before the current session of Parliament ends on February 25.
News Corp. shares touched an all-time high of $24.22 at the open of NY trading but were down 1.7% to $23.38 at 10:30 a.m.
Facebook's move contrasted with Google, which in recent days has brokered deals with media groups, including one announced earlier in the day with Rupert Murdoch's News Corp., in response to the regulatory push.
Facebook's new restrictions mean that Australian news publishers will not be able to share or post content on Facebook, and news from non-Australian sources can not be viewed or shared by Australian audiences. And it's possible that without real news, misinformation will fill the empty spaces on folks' news feeds.
"This announcement from Facebook, if they were to maintain this position, of course would call into question the credibility of the platform in terms of the news on it", Fletcher told ABC. The deal does not include Fox News, Google spokeswoman Maggie Shiels said. In 2019, Facebook announced deals to pay some publishers to share stories inside a dedicated news section of its main app. Facebook CEO Mark Zuckerberg announced the plan at an event in NY with News Corp.'s Thomson. "We will be pressing the case for transparency on how these funds are spent".