Three hours into Facebook’s Australian news blackout on 17 February 2021, a concerned employee sent a note to colleagues at the social media company.

“Australian news ban took down pages that are not news sources,” the note said, pointing to blocked government pages, fire and emergency services, official health pages and domestic violence charities.

“We should be proactive here, not reactive, given the damage this is doing to Facebook’s reputation in Australia.”

Some pages, including the Bureau of Meteorology and 1800Respect, were quickly restored, but others such as WWF-Australia and Women’s Legal Service were not.

Whistleblowers within Facebook’s parent company, Meta, have now come forward labelling the move a negotiating tactic in a long-running fight over legislation that would have required Meta and Google to negotiate with news organisations over payment for their content.

The submission from Whistleblower Aid to lawmakers in the US and the competition regulator in Australia was made public this month, containing screenshots of the internal Facebook conversation.

A tactic that worked

Facebook’s Australian newsban was the peak of the standoff between Meta and the former Morrison government over its news media bargaining code – the legislation which forces digital platforms to negotiate with news media companies.

Platforms that are “designated” under the code are subject to its terms, meaning they must reach an agreement with all media companies that meet the criteria of the code, otherwise they must go to an arbiter to determine the level of payment.

Platforms that refuse to negotiate with media companies face fines of $10m, or 10% of their annual Australian turnover, or three times the benefit obtained – whichever is greatest.

During consultation on the code, Meta warned it would mean news would disappear from Facebook. The move to ban it as the legislation was moving through parliament was a show of force.

Publicly, the company was arguing that the blocking of non-news pages was an accident, but the whistleblowers allege the company deliberately blocked non-news sites as a ploy – one that ultimately worked.

After the news ban, the former treasurer, Josh Frydenberg, and former communications minister, Paul Fletcher, cut a deal with Meta that stopped it from being designated under the law, as long as it could demonstrate it had made deals with enough media companies.

Soon Meta had signed agreements with the largest news publishers in Australia to pay for their news content, but because it wasn’t designated under the code, it didn’t have to enter agreements with all of them.

Senior Meta executives, including CEO Mark Zuckerberg, sent out congratulatory emails to the staff involved in the ban.

“This is something we’d been preparing for, but the last couple of weeks were intense,” Zuckerberg said in a screenshot included in the submission. “We were able to execute quickly and take a principled approach for our community around the world, while achieving what might be the best possible outcome in Australia.”

The whistleblowers’ lawyer, Andrew Bakaj, said the employees felt compelled to speak out to set the record straight about what really went on.

“The motivation was pretty clear in terms of why they did the Australian takedown and how they did it,” he told Guardian Australia. “So I think that having experienced that and seeing that, the whistleblowers felt that it was time to come forward to set the record straight for the Australian people.”

According to the allegations made in the document, Meta had established a specialised internal team to respond to the Australian Competition and Consumer Commission (ACCC), which was developing the legislation. Members of the team were required to sign non-disclosure agreements, which the whistleblowers have described as outside the norm for the company.

During the shutdown multiple employees outside the team tried to raise the alarm about the blocking of pages other than news, but the screenshots of conversations in the submission show they were either ignored or placated, even when proposing simple technical solutions that would have quickly restored the wrongly blocked pages.

Meta has refused to comment on the allegations made in the submission.

What’s the long game?

At the time of the news ban, Frydenberg said Australia had been a “proxy battle” for the rest of the world on the regulation of Google and Facebook.

“I have no doubt that so many other countries are looking at what is happening here in Australia, because of this innovative code the Morrison government is now pursuing, so Facebook and Google have not hidden the fact that they know that the eyes of the world are on Australia, and that is why they have sought to get a code here that is workable,” he said.

Other countries are now looking to replicate what Australia has done, but there’s no immediate way to stop Facebook from running the same playbook.

“I think that seeing that this has happened in Australia and effectively they can hold the Australian people and the Australian government hostage … they could do that anywhere,” Bakaj said. “This could have repeated itself, and I would hope that the likelihood is less now because it’s so public, but one can only hope.”

In Australia, Meta and Google have signed dozens of deals worth millions to a number of news organisations, including Guardian Australia, but Meta has been a reluctant negotiator, even for those with whom it has struck deals.

Only about 41% of publications in Australia have been able to secure agreements with Meta, and the company is refusing to negotiate with at least two larger publishers: the academic news site the Conversation, and the multicultural public broadcaster SBS.

There is a renewed push to have Meta designated under the code to force more negotiations, with the former ACCC chair Rod Sims calling for Meta to be designated after a Treasury review of the code is completed in September.

The new Labor government had been supportive of the code in opposition, but has not yet indicated whether it would make changes.

Bakaj said his team had not had a response from Meta, US Congress or the ACCC to the submission, but he is hopeful it will spark an investigation. He said in the United States, where most of Meta’s operations take place, there was close to a bipartisan agreement between Democrats and Republicans that Meta holds too much power, but that is as far as it goes.

“There was a legislator who told me ‘Democrats and Republicans do agree that there is a problem with Facebook, the problem is they don’t agree on what the solution is’,” he said.

“And so there is, I think, an effort to move forward, but that doesn’t necessarily mean that they’re in lockstep in terms of how to fix it.”