“The platforms responded with blackmail. Google threatened to withdraw search in Australia;Facebook cancelled news. A nation was held to ransom – and it surrendered. As long as the platforms persuade enough desperate news publishers to sign take-it-or-leave-it deals,there will now be no fair,independent arbitration. ”

Regardless of your view,the result is a global precedent. Other governments and companies will look at the Australian law as a case study in managing the US tech giants. It also serves as a reminder that media and politics are never far apart in Australia.

Seven was the first to announce a “letter of intent” with Facebook,which executive chairman Kerry Stokes described as “a significant move for our business” (Frydenberg was thebest man at the wedding of Ryan Stokes – Kerry’s son – to Queensland heiress Claire Campbell in 2016). Meanwhile,negotiations with Nine re-commenced almost immediately (Nine is chaired by former Liberal treasurer Peter Costello).

Zuckerberg could not ignore the Australian regime,particularly after he overplayed his hand last week. His decision toswitch off news sharing across Australia,to the point whereemergency services could not issue updates on the platform,prompted a global backlash.

“It was a brutal illustration of market power,” says Frydenberg.

The company had proven what Rod Sims,the chairman of the Australian Competition and Consumer Commission,had been saying all along. The blockade allowed Prime MinisterScott Morrison to push back with a warning – posted on Facebook,of course – about the company “unfriending” Australia.

Frydenberg was on the phone to Zuckerberg soon after the extraordinary move. The pair spoke for half an hour in the early evening of Friday,February 19,when the Facebook chief vented his frustration about the Australian law. His biggest grievance was with the power of an independent arbitrator to force outcomes on the company under the bargaining code.

That set the agenda for another round of government talks over the following weekend. Frydenberg and Morrison talked through the problems but Facebook’s preferred option – withdrawing the bill – was never going to happen. The talks intensified over the next few days. Frydenberg spoke to Zuckerberg six times over Monday and Tuesday. At one point the Treasurer had to duck out of a cabinet meeting to take the call.

The Treasurer was also talking to Stokes,News Corp Australia boss Michael Miller,Costello and Nine’s chief publishing and digital officer,Chris Janz,as well as Guardian Australia managing director Dan Stinton.

“We all knew we were negotiating the details of an agreement that had global ramifications,” Frydenberg says. “Let’s face it,big tech doesn’t like regulation. And it was clear neither Google nor Facebook wanted the code in the first place. But at the same time,they realised the Morrison government was not for turning. And we made a clear path for them to reach commercial deals.”

The message to Facebook was that it could avoid the most draconian regulation if it moved fast to strike commercial agreements with publishers. That is what Sundar Pichai,the cricket-loving chief executive at Google,had done earlier this month when his companysigned letters of intent with Seven,News,Guardian Australia and Nine.

At the same time the media companies kept talking to Google and Facebook. The conversations – which took place predominantly on video platforms such as Google Meet and Bluejeans – were frustrating and sporadic until the final amendments to the code were put in place.

Google’s head of news,web and publishing products,Kate Beddoe,worked from her Singapore home trying to liaise between Silicon Valley and Australia. When Google got close to an agreement,Beddoe would loop in Google Australia’s legal head,Shoshana Shields. There were other moments where ‎strategic partner development manager Tom Curtis would also join the talks. On one occasion after Google Australia boss Melanie Silva went on maternity leave,Caroline Rainsford (NZ managing director) joined one call with Nine. Her lack of expertise on the code meant it did not end well.

Google’s managing director of global product partnerships,news,web and publishing,Tom Turvey,a more senior executive based in the US,joined one conversation after Kerry Stokes became involved.

There were two key players in the Facebook talks – local head of news partnerships Andy Hunter and New York-based Ross Giesel,who is part of the “deal” team. Local managing director William Easton has also made an appearance on one or two calls. Behind the scenes were president of global partnerships Marne Levine and head of global news partnerships Campbell Brown.

At Nine,Janz,who cut alucrative advertising deal with Google in 2017 for Fairfax Media,and his director of subscriptions and growth,David Eisman,led the talks and reported through to Costello. Eisman is a former consultant at Port Jackson Partners,the advisory firm that counts the ACCC’s Sims as a former director.

Guardian Australia’s Stinton handled the Google discussions but consulted regularly with his editor-in-chief Lenore Taylor. Guardian’s global chief executive,Annette Thomas,and chief financial officer Keith Underwood were kept in the loop and signed off on Google’s agreement.

Seven put together a management team committee early last year and hired two consultants to help executives understand the amount of money they could demand from Google and Facebook. Charles River Associates,the consulting firm that advised Google in a Federal Trade Commission anti-trust investigation and submitted suggestions to the ACCC’s code concepts paper,and Jason Ockerby from Competition Economists Group also assisted. Seven’s original team was made up of chief executive James Warburton,commercial director Bruce McWilliam,chief digital officer Gereurd Roberts,head of news Craig McPherson,Seven West Media WA managing director Maryna Fewster,West Australian Newspapers editor-in-chief Anthony De Ceglie and head of regulatory and government affairs Justine McCarthy. But as Frydenberg began calling media companies and urging them to do deals,the broader group was narrowed to Roberts and Warburton with the help of McWilliam. It wasn’t until the very end that Stokes got involved.

News Corp’s negotiations were held out of the US.

According to media companies in the discussions,a lot of the early talks seemed disingenuous – offers that could not be accepted and were made only to show the government it was co-operating. It wasn’t until Frydenberg’s amendments that most media companies said Google and Facebook had come to the table serious about making “workable” deals.

To allay Facebook’s concerns,Frydenberg prepared an amendment to make it clear that an internet company’s willingness to reach commercial agreements would be taken into account in any government decision to “designate” a platform and apply tougher regulation.

This raises a key question for the future. The law is in place but it only gains real teeth if and when Frydenberg signs a regulation that designates a company and subjects it to mandatory bargaining. That will be necessary only if publishers cannot get the commercial deals they want and if the ACCC backs their complaints.

‘We all knew we were negotiating the details of an agreement that had global ramifications.’

Treasurer Josh Frydenberg

Will Frydenberg ever take that step? Will he bring on another,bigger fight?

“Well,let’s see. If we get commercial deals with the parties – and we’ve made it very clear that it’s important to put offers with the smaller players – then that’s a very good pathway forward,” he says. “There’s now an imperative for these digital giants to strike commercial deals.”

The internet and media industries are not the only ones who will be watching. Government leaders and ministers will be,too. Morrison has alreadyraised it with Indian counterpart Narendra Modi and Canadian counterpart Justin Trudeau.

With the deals done and the law passed,Frydenberg spoke on Thursday morning to Canadian deputy prime minister and finance minister Chrystia Freeland. It is fair to expect more international calls in the weeks ahead.

“With the support of the ACCC we held our ground right through the negotiations,” Frydenberg says. “And the net result is that Australian media businesses are now getting paid by the digital platforms for generating original content. If this was easy,other countries would have moved long ago. It is a very significant micro-economic reform where Australia is helping to lead the world.”