It means social media networks will have to remove offending content within 24 hours.
French MPs have passed a landmark bill to fight online hate speech. There were 434 who voted for the law and 33 who voted against it.
It means social media networks will have to remove offending content within 24 hours.
A new button will enable users to flag-up any abuse. It is modelled on German legislation, which started last year.
Sites, who fail to comply, will be fined up to 4% of their global revenues.
French MP Caroline Abadie rejected claims from critics that it was an attack on freedom of speech and will trigger censorship.
"For us, freedom of speech is already in danger," she told Euronews. "We have people on the internet — because they are women, because they are gay, because they have disabilities, because of the colour of their skin — that are censored.
"They self-censor, they don't say everything they want. For us, it's already a problem and that's why we're asking the social networks to remove content that is already forbidden.
"We are not doing new restrictions on freedom of speech. There is a law from 1881 that says you cannot say those things in newspapers or on the radio so we don't want that these things are said on the internet."
