Meta Platforms said it will stop paying Australian news publishers for content that appears on Facebook, setting up a fresh battle with Canberra which had led the world with a law that forces internet giants to strike licencing deals.

News publishers and governments like Australia have argued that Facebook and Google unfairly benefit when links to news articles appear on their platforms. Meta has been scaling back its promotion of news and politics content to drive traffic and says news links are now a fraction of users' feeds.

Meta will discontinue a tab on Facebook which promotes news in Australia and the United States, it said in a statement, adding that it cancelled the news tab last year in the UK, France and Germany.

As a result, "we will not enter into new commercial deals for traditional news content in these countries and will not offer new Facebook products specifically for news publishers", the statement added.

The decision pits Meta against the Australian government which under a 2021 law - opposed by Meta - has the power to appoint a mediator who determines how much big tech firms pay for news links.

"Meta's decision to no longer pay for news content in a number of jurisdictions represents a dereliction of its commitment to the sustainability of Australian news media," Communications Minister Michelle Rowland and Assistant Treasurer Stephen Jones said in a joint statement.

The government was seeking advice on next steps from the treasury department and antitrust regulator the Australian Competition and Consumer Commission, they added.

The country's biggest media outlets lambasted the decision, calling it an attack on the industry.

"Meta is using its immense market power to refuse to negotiate, and the government is right to explore every option for how the Media Bargaining Code's powers can be used," said News Corp Australasia Executive Chairman Michael Miller.

"Meta is attempting to mislead Australians by saying its decision is about the closure of its news tab product (and its) decision will directly impact the viability of Australia's many small and regional publishers," Miller added.

Nine Entertainment CEO Mike Sneesby said the decision failed to acknowledge the value that the media firm, which owns the Sydney Morning Herald and Australian Financial Review mastheads and a free-to-air television channel, created for Meta.

When the 2021 law was introduced, Meta resisted, resulting in a brief news blackout on Facebook in Australia that year. A similar law passed in Canada in 2023 resulted in a news blackout there which is still in place.

Under Australia's law, the country's government must decide whether it will appoint its own mediator to set Meta's fees. The company's deals with Australian media outlets mostly ran for three years, meaning they were set to expire in 2024.

Meta is, however, not obligated to pay news publishers if it implements a ban that prevents users from reposting news articles. It said on Friday that publishers could continue posting news content on Facebook.

Google's media licencing deals mostly ran for five years, expiring in 2026. A spokesperson said the company has already started negotiations for deal renewals.

Some 22 million of Australia's 26 million population are Facebook users.