Originally due to be finalized by November 2020, the code, introduced by competition watchdog Australian Competition and Consumer Commission (ACCC), was to require the digital ad giants to negotiate in good faith on how to pay news media for use of their content, to advise news media in advance of algorithm changes that would affect content rankings, to favor original source news content in search page results and to share data with media companies.
From early Thursday, Australians were unable to post links to news articles or view the Facebook pages of news outlets from anywhere in the world.
The websites of several public agencies and emergency services were also blocked on Facebook, including pages that include up-to-date information on COVID-19 outbreaks, brushfires and other natural disasters.
"Facebook's actions in Australia demonstrate precisely why we need jurisdictions across the globe, including the United Kingdom, to coordinate to deliver robust regulation to create a truly level playing between the tech giants and news publishers".
By mid-afternoon, many government-backed Facebook pages were restored but several charity pages and all media sites remained dark, including those of global outlets like the New York Times, the BBC, News Corp's Wall Street Journal, and Reuters.
In recent years, Facebook and Google have debuted programs to pay for news. "Cutting off access to vital information to an entire country in the dead of the night is unconscionable".
Facebook, which has always been criticized for allowing misinformation to flourish on its platforms, now finds itself in a peculiar position of also blocking the news media that has provided a fact check on false content.
"What they're effectively saying to Australians is, "You will not find content on our platform which comes from an organisation which employs professional journalists, which has editorial policies, which has fact-checking processes", he said.
The idea that tech companies should have to pay for content on their platforms has been pushed by publishers for some time now, and Murdoch and News Corp have been one of the fiercest proponents. "Publishers do not voluntarily provide their content" to Google, William Easton, Facebook's managing director for Australia and New Zealand, wrote in a blog post.
Easton said the proposal left Facebook "facing a stark choice: attempt to comply with a law that ignores the realities of this relationship, or stop allowing news content on our services in Australia. With a heavy heart, we are choosing the latter".
News Corp CEO Robert Thomson thanked Google CEO Sundar Pichai and his team for showing a "thoughtful commitment to journalism that will resonate in every country".
"He raised a few remaining issues with the Government's news media bargaining code and we agreed to continue our conversation to try to find a pathway forward", he wrote.
After Facebook chose to pull the news plug Thursday, Australia's Prime Minister Scott Morrison signalled his willingness to press ahead with the legislation regardless.
"Everything that I have heard from parties, both in the news media business and in terms of digital platforms, is that these are generous deals", Frydenberg said.
"Unfortunately this legislation does not do that". Google now accounts for 51% of all online advertising in Australia while the Australia Competition and Consumer Commission (ACCC) notes that over 90% of online searches now occur through Google.
"These actions will only confirm the concerns that an increasing number of countries are expressing about the behaviour of Big Tech companies who think they are bigger than governments and that the rules should not apply to them".