News Corp inks Australia Facebook deal, signalling truce after blackout

By Byron Kaye

SYDNEY (Reuters) - Rupert Murdoch's News Corp reached a content-supply deal with Facebook Inc in Australia, the companies said on Tuesday, a step toward settling a dispute that saw the social media giant briefly shut down thousands of pages in the country.

The agreement, terms of which were not disclosed, makes News Corp the first major media outlet to strike a Facebook deal under controversial new laws that let an Australian government-appointed arbitrator set fees if companies fail to do so.

Facebook's shutting out all media content in the country for a week last month angered world leaders, as the blackout included emergency services and government health pages. It ended the shutdown when Australia agreed to soften some parts of the new regulations.

News Corp, which owns about two-thirds of Australian metropolitan newspapers, was among media companies calling for the government to make Facebook and Alphabet Inc's Google pay for the media links that drive viewers, and advertising dollars, to their platforms.

Google had also objected for months and threatened, like Facebook, to withdraw core services from the country, before signing deals with most media outlets - including News Corp - in the days before the rules became law.

"The agreement with Facebook is a landmark in transforming the terms of trade for journalism, and will have a material and meaningful impact on our Australian news businesses," News Corp CEO Robert Thomson said in a statement that thanked the Australian prime minister, treasurer and chief antitrust regulator by name.

Facebook's head of news partnerships in Australia, Andrew Hunter, said the deal meant Facebook's 17 million users in the country "will gain access to premium news articles and breaking news video from News Corp's network of national, metropolitan, rural and suburban newsrooms".

As well as the country's top-selling tabloids The Daily Telegraph in Sydney and The Herald-Sun in Melbourne, News runs a subscription cable TV network called Sky News, which struck a separate Facebook deal, the terms of which were not disclosed, according to News Corp.

News Corp was first to say it struck a Facebook deal, but free-to-air television broadcaster and newspaper publisher Seven West Media Ltd has previously said it signed a letter of intent to do so.

On Tuesday, Seven rival Nine Entertainment Co Holdings Ltd reported in the Australian Financial Review that it had also signed a letter of intent for a Facebook deal.

"I've always had the view we need to see this playing out," said Australian Competition and Consumer Commission Chair Rod Sims, the architect of the new laws, in a telephone interview.

"If they've done a deal with News Corp, they're obviously in the groove of doing deals with others."

A Nine spokesman said the company, which also publishes the Sydney Morning Herald newspaper, "continue(s) having constructive and fruitful discussions with Facebook (and) when we have anything to announce we will do so".

A Facebook spokesperson declined to comment on the Nine negotiations.

(Reporting by Byron Kaye in Sydney and Uday Sampath in Bengaluru; Editing by Shinjini Ganguli and Gerry Doyle)