Google must negotiate payments with French publishers to use their news content, an appeals court has ruled.
The tech giant has been ordered to discuss remuneration for news agencies if they reshare content, photos, or videos online in Google search results or on Google News.
The long-awaited decision by the Paris Court of Appeal confirms an earlier order given by France's competition authority in April.
French regulators had argued that Google must negotiate payments under a "neighbouring rights" law which was adopted by the European Union in 2019 to overhaul the bloc's copyright regulations.
The rules make it possible for media organisations to demand payments when search engines display extracts of their material.
News companies had pushed for the EU copyright reform amid concerns that digital giants were dominating market ad revenue in the journalism sector.
Google had threatened to delete news content, arguing that the use of photos and videos would direct millions of users to publishers' websites and result in increased traffic.
The company had also appealed the decision by the competition authority, unsuccessfully arguing that the watchdog had overstepped its authority.
Meanwhile, Google has discussed digital copyright with French newspapers and said on Wednesday that they were close to a deal.
“Our priority remains to reach an agreement with the French publishers and press agencies,” the company said.
“We appealed to get legal clarity on some parts of the order, and we will now review the decision of the Paris Court of Appeal.”
The president of France's competition authority, Isabelle de Silva, welcomed the court's ruling as a "very important decision" on Twitter.
"Competition applies to everyone, including in the digital world," tweeted de Silva.
The court decision in Paris could also have a global impact, as France was the first EU country to apply "neighbouring rights" regulations.
Google and Facebook are also facing pressure in Australia, where regulators want companies to pay for using news content.
Facebook has threatened to block publishers and users from sharing news in the country over the proposed law.
Meanwhile, Google said last week it would pay $1 billion over the next three years to publishers in Germany, Brazil, Argentina, Canada, and the UK, in an attempt to defuse tensions with the industry.
But France has not been included in the plan, dubbed Google News Showcase, which aims to improve the revenues of newspaper publishers around the world by paying for licenses.
A study by communications group Heroiks found that the French press remains heavily dependent on Google for the traffic of its websites.