Facebook Inc. today said it would restrict the ability of users in Australia to share news on its platform, just hours after Google LLC announced it will pay News Corp. for the rights to display articles in search results.

Both developments come in response to a proposed Australian law that would require the two tech giants to compensate news publishers whose content they show to users. The legislation would subject the companies to up to $7.4 million in civil penalties for noncompliance. Moreover, it specifies that if Facebook and Google fail to reach an agreement with publishers on price, an “independent arbiter” should decide how much they are required to pay.

The companies have reacted to the legislative initiative in diametrically opposite ways.

William Easton, the general manager of Facebook’s Australia and New Zealand operations, wrote in a blog post today that the company will block Australia-based users from viewing news content on the social network. That includes news content from both local and international publishers. Australian publishers, in turn, can’t post or share any content on their Facebook Pages.

The move also affects Facebook’s international user base. Consumers outside Australia can’t view or share Australian news content on the social network, according to Easton. 

“The proposed law fundamentally misunderstands the relationship between our platform and publishers who use it to share news content,” the executive wrote in the blog post. “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.”

Easton also addressed Google’s response to the law. “Our platforms have fundamentally different relationships with news,” he wrote. “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.”

Facebook’s move came just hours after Google announced its content agreement with News Corp., the largest newspaper publisher in Australia by circulation. The dollar value of the deal was not disclosed. However, News Corp. stated in an announcement today that the agreement will see Google make “significant payments” in return for the right to display content from its publications.

The three-year contract covers content from more than a dozen New Corp. papers in Australia, as well the U.S. and U.K. The deal also has a number of additional components besides news licensing. Google will, among others, work with News Corp. to develop a subscription platform and is set to share certain revenues generated from its online ad services with the company.

The News Corp. partnership is the latest in a series of content licensing agreements Google has struck with Australian media companies in recent days. Additionally, it was reported earlier today the search giant is close to signing another, $30 million licensing deal with Australian broadcaster Nine Entertainment. 

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