News Corp Australia has denied making and breaking prime ministers, having "racism as a business model" and running campaigns of "character assassination".
"Democracy is messy, it is a work in progress and relies on the robust exchange of news, views and opinions," executive chair Michael Miller said on Friday, fronting a parliamentary inquiry into media diversity.
"This is not democracy failing, this is democracy working."
"We ask tough questions," he said, when quizzed by committee chair Senator Sarah Hanson-Young about "Dictator Dan" headlines during Victoria's five-month lockdown.
"He (Premier Dan Andrews) was telling Victorians how to live and they weren't happy about it," Mr Miller said.
Fellow witness, News Corp group executive Campbell Reid, said: "It's not character assassination to closely examine the actions of people in public life."
Mr Miller said agreements with Google announced this week, and News Corp's own global deal with the tech giant, will support news producers and diverse audiences amid the "digital revolution".
He urged the committee to "push back at those who want to see it through the prism of days gone by"
Mr Rudd, speaking as the first witness on Friday, called for Australians to resist the Murdoch media empire "culture of fear" and the emerging monopolies of Google and Facebook.
Proposed media bargaining laws simply entrench the power and reach of the "Murdoch mob", he warned.
He said more than half a million people had signed a petition calling for a royal commission, because they knew something was crook.
Mr.Rudd admitted he was "fearful" of News Corp while prime minister.
"When did I stop being fearful? Probably when I walked out of the building in 2013.
"The truth in this building is that everyone's frightened of Murdoch.
The "Fox News-isation" of the Australian media was well under way thanks to Sky News Australia, breeding climate change denialism and encouraging far-right political extremism, Mr Rudd said.
"The Murdoch media empire has campaigned viciously against one side of politics," he said, also calling out the "misogyny" and "ditch the witch" imagery used during Julia Gillard's prime ministership.
Mr Miller said Mr Rudd was making false claims about News Corp exercising a monopoly and undue influence in Australia.
"He has misled you," he told the committee.
Mr Miller said the full impact of Facebook's move on Thursday to block news access and sharing in Australia was yet to be understood.
"The door is still open for Facebook," he said, as Treasurer Josh Frydenberg tries for a workable law that includes Facebook.
"To proceed with the code is important," Mr Miller said.
Now backed by philanthropists after its media owners sold out last year, Australian Associated Press chief executive Emma Cowdroy, chairwoman Jonty Low and editor Andrew Drummond say one of the most efficient ways of supporting media diversity is to ensure the national newswire is properly resourced.
"Take AAP out of the equation and it's even worse," Mr Rudd said.
The competition watchdog, which is keeping a watching brief on AAP's former owners, says its two key concerns about diversity are the impact of tech giants Google and Facebook and ensuring the viability of an independent national newswire.
"I am personally delighted that the AAP newswire has survived," Mr Miller said.
"It is by nature independent," unlike News Corp Australia's new centralised newswire, he said.
"But we don't pretend that it is."
Nine chief executive Hugh Marks also called for the government to stick to its plan to legislate the media bargaining code and rejected Mr Rudd's call for a royal commission.
But he was concerned about Facebook's decision to limit Australians' access to news.
Australian Associated Press