Mark Zuckerberg and Josh Frydenberg speak

Treasurer Josh Frydenberg has revealed he had a “constructive discussion” with Facebook founder Mark Zuckerberg, after the social network announced it would block Australian news content.

It came as Facebook is refusing to bend to a regulatory push that would force the social giant to share revenue with media outlets.

“This morning, I had a constructive discussion with Mark Zuckerberg from #Facebook,” Mr Frydenberg tweeted.

“He raised a few remaining issues with the Government’s news media bargaining code and we agreed to continue our conversation to try to find a pathway forward.”

Australia is poised to adopt legislation that would force digital companies to pay for news content, something that would create a global precedent and, according to Facebook and Google, impact the way the internet works.

“The proposed law fundamentally misunderstands the relationship between our platform and publishers who use it to share news content,” said Facebook’s manager for Australia and New Zealand, William Easton.

“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.”

But the federal government is standing firm against the tech juggernaut, with Communications Minister Paul Fletcher saying while the move was a concern he expects Facebook and Google will stay in Australia.

“We’ve had continuing discussions with Facebook. They have chosen to make this announcement. There are already questions about the credibility of the information and sources on the Facebook platform,” he told radio station 2GB.

“They’re basically saying to Australians: ‘If you’re looking for reliable news, Facebook is not the place to look for it.’

“It costs money to employ journalists who have proper fact-checking purposes and provide reliable information and that is a key policy issue the Australian government is concerned about. “What has been announced by Facebook this morning raises very serious questions, including the credibility of information on Facebook.”

Facebook’s move contrasted with Google, which in recent days has brokered deals with media groups (including a deal reached with News Corporation, which was announced today), in response to the regulatory push.

Mr Easton said that Facebook’s platforms “have fundamentally different relationships with news”.

“Google Search is inextricably intertwined with news and publishers do not voluntarily provide their content. On the other hand, publishers willingly choose to post news on Facebook, as it allows them to sell more subscriptions, grow their audiences and increase advertising revenue,” he said, claiming the arrangement worked in publishers’ favour.

“Last year Facebook generated approximately 5.1 billion free referrals to Australian publishers worth an estimated AU$407 million,” he said.

Earlier this week, Australian officials said the two US tech giants were close to deals with major Australian media to pay for news to resolve a standoff being closely watched around the world.

The companies had threatened to partially withdraw services from the country if the rules become law, sparking a war of words with Canberra.

Mr Easton said Facebook has argued to Australian officials that “the value exchange between Facebook and publishers runs in favour of the publishers,” and generates hundreds of millions of dollars of revenue for the media organisations.

“We’ve long worked toward rules that would encourage innovation and collaboration between digital platforms and news organisations,” Mr Easton said.

“Unfortunately this legislation does not do that. Instead it seeks to penalise Facebook for content it didn’t take or ask for.”

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