Australia's simmering digital news war blew up today, with Google and Facebook taking dramatically different steps in response to a plan to charge them for news content.

In a move that grabbed headlines while simultaneously erasing them, Facebook announced it would eliminate all news links from its Australian site.

Less spectacularly but perhaps just as significantly, News Corp announced a global deal with Google to share content and ad revenue and develop a subscription platform.

Taking Facebook first: If its purpose was to make its views known about the government's proposed news media bargaining code, it can consider them known (see Taming the tech giants).

Even the 30% of Australians who get their news via Facebook cannot have missed the backlash from the prime minister down.

Announcing the ban overnight, the social media firm said it was left with no choice because the code "fundamentally misunderstands the relationship between our platform and publishers."

But its bold stand soon descended into something between a farce and an outrage.

It has blocked not just Australian news media, and not just news providers from anywhere in the world, but also health departments trying to issue COVID-19 information, non-profit community media, the national weather agency and, somehow, Facebook's own page.

An opposition MP complained that radio station pages had been blocked in the middle of the summer bushfire season:

Even those sympathetic toward Facebook were critical.

Scott Purcell, founder of lifestyle website Man of Many, told Sydney Morning Herald he understood the rationale of the ban "as we believe the proposed code was unworkable in its current form, particularly for publishers to be paid for content that they voluntarily share to such platforms."

But he pointed out it would have a significant impact on many smaller independent publishers "who have been courted by Facebook to grow their audiences on the platform."

The former head of Facebook Australia & New Zealand, Stephen Scheeler, said Facebook had overplayed its hand.

"By using its enormous power intentionally, Facebook may have made it impossible for the world to continue ignoring that it has that power."

Google, meanwhile, had threatened to shut down its Australian search engine. But the arrival of the bill in parliament earlier this week instead has had the opposite effect.

The search firm has announced a series of deals with local media companies, including the two biggest television networks, Seven West and Nine Entertainment, each reportedly worth more than A$30 million (US$23.4 million) a year over five years.

But the agreement with News Corp, in the wake of a similar compact between Google and major French publishers last week, escalates it from a local imposition into a potential global template. The deal includes titles such as the Wall Street Journal and the New York Post, The Times and the Sun in the UK, and all of its Australian news sites.

For News Corp, it's the fulfillment of something it has sought since the early 2000s.

"This has been a passionate cause for our company for well over a decade," said CEO Robert Thomson in a statement. "For many years, we were accused of tilting at tech windmills."

Critics of the news code, including web founder Tim Berners-Lee, say that it breaks one of the fundamental principles of the web of not charging for links.

Jeff Jarvis, professor at the CUNY Craig Newmark Graduate School of Journalism, sees it as a blow to the open Internet but also took to Twitter to describe the deal as a "big bucket of baksheesh" for old-guard media proprietors to keep competitors out of the market. He added that "none of this blackmail loot will end up benefitting journalists. It will go to rapacious hedge funds and their ilk."

In defense of the code, its author Rod Sims, head of the Australian competition regulator, has said it "evens up bargaining positions so that fair, commercial deals can be made." He told a parliamentary committee on January 21: "Without the code as a back-up, that power imbalance will remain."

Sims denied the new rules would require Google and Facebook to pay for linking news content. They were negotiating deals based on lump sums, not per link, he said, pointing out Google already paid for content, such as the right to display music lyrics in search results.

"I do not accept the argument that the code will break search or destroy a 'free and open Internet' any more than paid search ads destroyed search," he said.

The Australian government will review the media code a year after the legislation is passed.

Scheeler, the former Facebook exec, said the standoff between Australia and Facebook could be the catalyst for genuine global reform.

"It could be that future historians of the Internet come to see this decision as the moment the world sat up and started to take serious action on making Big Tech accountable to society."

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— Robert Clark, contributing editor, special to Light Reading