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Hong Kong (CNN Business)Facebook (FB) is warning its users in Australia that it will prevent them from sharing local and international news if the country moves forward with new legislation that would force the company to pay media outlets for the use of their news content.
"This is not our first choice — it is our last," Will Easton, managing director of Facebook Australia and New Zealand, wrote in a blog post Monday. "But it is the only way to protect against an outcome that defies logic and will hurt, not help, the long-term vibrancy of Australia's news and media sector."
The move marks another dramatic escalation of tension in Australia over the proposed law, which was announced in July.
Last month, Google (GOOGL) also expressed its opposition to the legislation, using its search engine homepage in Australia to warn local users that it would harm their ability to search and lead to "consequences" for YouTube users.
The proposal would allow certain media outlets to bargain either individually or collectively with Facebook and Google — and to enter arbitration if the parties can't reach an agreement within three months, according to regulators. That process would involve an independent arbitrator looking at offers from both sides and settling the matter within 45 business days.
Both tech firms argue that the legislation is unfairly skewed toward publishers, and would force them to pay news companies while the tech firms contend they already do plenty to support them.
Easton, for example, said that Facebook's decision this week came after it had already tried to work with regulators on ways to work more closely with media outlets.
"We already invest millions of dollars in Australian news businesses and, during discussions over this legislation, we offered to invest millions more," he wrote. "We had also hoped to bring Facebook News to Australia, a feature on our platform exclusively for news, where we pay publishers for their content."
Those proposals were "overlooked," he said.
Regulators, on the other hand, say the move is needed to level the playing field for the news media in Australia. Since January 2019, more than 200 newsrooms across the country have reduced service, closed temporarily or permanently shut down, according to estimates from the Australian Newsroom Mapping Project, which is run by the Public Interest Journalism Initiative, a local nonprofit group.
Australian Treasurer Josh Frydenberg responded to Facebook's announcement Tuesday, saying the reforms would help "create a more sustainable media landscape."
"Australia makes laws that advance our national interest. We don't respond to coercion or heavy handed threats wherever they come from," he said in a statement.
The Australian Competition and Consumer Commission also fired back at Facebook's latest announcement, saying in a statement that "Facebook's threat today to prevent any sharing of news on its services in Australia is ill-timed and misconceived."
For now, Google and Facebook are the only tech companies that would be subject to the new regulation. But other platforms may be added in the future, according to regulators.
The outcome of the proposal is likely to be closely watched across the globe. Other countries have previously passed legislation to try and force internet giants to pay publishers — albeit with limited effect.
Easton said Monday that "the proposed law is unprecedented in its reach and seeks to regulate every aspect of how tech companies do business with news publishers."
"We are left with a choice of either removing news entirely or accepting a system that lets publishers charge us for as much content as they want at a price with no clear limits," said Easton. "Unfortunately, no business can operate that way."
If Facebook goes ahead with its decision to restrict news on its platforms, it will not affect the company's other offerings for users in Australia, he added.
The legislation went through a public consultation phase last month. It will next have to be finalized and put forward to parliament, where lawmakers will vote on whether to pass it.
