Facebook followed Google in agreeing to negotiate paid arrangements with Australian media, leading the government to water down the arbitration requirements.
Critics accuse authorities of using national security as an excuse for threatening journalists over media revelations that are embarrassing for the government.
AAP's more than 170 journalists will stop working by June 26. Its Pagemasters editorial production service will also close at the end of August, the company said.
Rival media businesses have published redacted front pages in a coordinated effort to protest media restrictions. In June, the government raided the home of a News Corporation journalist and the Australian Broadcasting Corporation HQ.
Australian media organisations want journalists to be exempt from national security laws passed since 2012 which "would put them in jail just for doing their jobs."
David William McBride appears in court on charges relating to the leaking of classified documents about Australian Special Air Service involvement in Afghanistan to ABC journalists.
Police raided state-funded Australian Broadcasting Corp on Wednesday, a day after raiding a News Corp editor. The operations were in relation to alleged crimes of receiving and leaking classified information, kicking open questions of press freedom.
The "Herald Sun," owned by News Corp, first published the caricature of Williams with exaggerated lips and tongue and curly hair rising from the top of her head as she stomped on her tennis racket on Monday.
If Facebook wants to maintain its status as the world's biggest social media network it will need to rebuild trust, yes, but more importantly it will need to share a piece of the pie.
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