By Colin Packham and Swati Pandey
CANBERRA (Reuters) - Australia's parliament passed a law on Thursday to make Alphabet (NASDAQ:GOOGL) Inc's Google and Facebook Inc (NASDAQ:FB) pay media companies for content on their platforms in reforms that countries such as Britain and Canada are looking to replicate.
After robust negotiations in which Facebook blocked all news content in the 13th-largest economy, the vote makes Australia the first nation where a government arbitrator can set the price tech giants pay domestic media if private talks fail.
"The code will ensure news media businesses are fairly remunerated for the content they generate, helping to sustain public interest journalism," Treasurer Josh Frydenberg and Communications Minister Paul Fletcher said in a joint statement.
Facebook's news ban, which also blacked out many nonprofit and government pages, including those of public health agencies promoting reliable information about COVID-19, would be lifted the following day, Frydenberg added in a radio interview, eight days after the measure took effect.
Representatives of both Google and Facebook did not immediately respond to Reuters' requests for comment.
The new law sets the stage for a dispute-handling process largely untested in corporate Australia, should negotiations between Big Tech and media companies fail. Its progress will be closely watched globally.
Both sides claimed victory after Australia offered Facebook some concessions, including government discretion to release the tech giants from arbitration if they can prove a "significant contribution" to the domestic news industry.
The revised code also allows the tech companies a longer period to cut media deals before the state intervenes. It will be reviewed within a year of taking effect, the joint statement said, but gave no start date.
For months Facebook and Google threatened to pull core services from Australia if the law took effect. But in the days before the vote, and before Facebook blocked news, Google struck some deals with publishers News Corp (NASDAQ:NWSA).
Several large Australian media companies, including Seven West Media, Nine Entertainment and the Australian Broadcasting Corp have said they were in talks with Facebook.