Sydney, Australia - Facebook announced on Wednesday that it will no longer allow news articles to be viewed or shared on its platform in Australia because of a contentious new media law under consideration.

The social media giant said Australian publishers are now "restricted from sharing or posting any content," and Australian audiences can no longer access or share content from international outlets.

The escalating dispute stems from the News Media Bargaining Code, a legislative proposal introduced into Australia's parliament in December.

The new legislation would force Facebook, Google, and other big tech companies to pay news publishers for content, or else face fines.

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"The proposed law fundamentally misunderstands the relationship between our platform and publishers who use it to share news content," Facebook said in a statement.

"It has left us 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."

"The value exchange between Facebook and publishers runs in favor of the publishers," Facebook wrote, saying its platform generated 5.1 billion referrals to Australian publishers. It claimed the referrals were were worth an estimated AUS $407 million (US $315 million).

Facebook first threatened to ban news for Australians in August 2020 and repeated the ultimatum before a Senate inquiry in January.

The company also blocked government pages including state health pages, which provide important coronavirus updates, and the Bureau of Meteorology, which provides disaster updates.

Facebook later restored the pages and claimed it didn't intend its news ban to impact government pages.

"As the law does not provide clear guidance on the definition of news content, we have taken a broad definition in order to respect the law as drafted. However, we will reverse any pages that are inadvertently impacted."

Treasurer Josh Frydenberg strongly criticized Facebook's move.

"Facebook's actions were unnecessary, they were heavy-handed, and they will damage its reputation here in Australia," Frydenberg told reporters in Canberra on Thursday.

"Their decision to block Australians' access to government sites – be they about support through the pandemic, mental health, emergency services, the bureau of meteorology – were completely unrelated to the media code."

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In January, Google threatened to pull its search engine from Australia if the law went into effect.

The Australian Competition and Consumer Commission developed the code, and it has been endorsed by Prime Minister Scott Morrison.

After Google said it could leave the Australian market, Morrison defended the proposal by saying that "Australia makes our rules for things you can do in Australia."

"That's done in our parliament. It's done by our government. We don't respond to threats."

Google has since struck deals with Rupert Murdoch's News Corp, Seven West Media, and Nine Entertainment and is in talks with public broadcasters ABC and SBS, as well as Guardian Australia, the news agency AAP reported.