Greens Senator Sarah Hanson-Young roasted Treasurer Josh Fryderberg, telling Parliament: 'The government has buckled here.
'You've blinked, you weakened the power the minister has because Facebook bullied you. This is a face-saving exercise by the Treasurer'.
Facebook shocked the world last week when it blocked Australian news websites in response to a new law forcing it to pay media companies for news content.
The tech giant on Tuesday said it would end the ban after the government made changes to the bill, including a clause exempting a platform if it makes a 'significant contribution' to news in Australia.
The Greens and independent senator Rex Patrick said this amendment could allow the Treasurer to let big tech off the hook after just a few deals with large companies like News Corp, leaving smaller publishers unable to get any cash.