Google has much more to lose. It's pretty common to use search engines to look up current events. There are plenty of competitors hungry for market share. Meanwhile, the only people who would care if FB blocked news articles would be people who share them, which is a tiny fraction of users. It's not like you're getting the news for TikTok or Instagram either.

Google actively indexes the news sites and offer present them in its search results.

But on Facebook the news publishers voluntarily share their stories.

That’s the biggest difference in my opinion.

Google didn't blink. When the government said search was included Google threatened to withdraw search. Search is now excluded [0], and the threat is withdrawn.

Since Google stated it was prepared to share revenue from news.google back in June and now that is all that is happening, I'd say someone else blinked.

[0] https://theconversation.com/this-weeks-changes-are-a-win-for...

Google came to the conclusion that they couldn't legally extricate themselves without pulling out of Australia entirely. Since the bill forced companies to treat the news content in question the same it's all or nothing for removal. Facebook faced losing all news content in Australia, Google faced losing the golden goose in Australia. They had more incentive to come to an agreement.

Google already had a plan for this back in October 2020 (in terms of paying a premium for news). https://blog.google/outreach-initiatives/google-news-initiat...

Cowardness.