A French appeals court upheld an order for Google to open negotiations with French publishers over payments to use their news content.
The Paris Court of Appeal sided with France's competition authority, which had ordered the U.S. tech company to discuss compensation with publishers and news agencies for reusing their material online.
French regulators had argued that Google must sit down for talks under a "neighboring rights" law adopted after the European Union overhauled the bloc's copyright rules, which include allowing news companies to demand payments when search engines display snippets of their stories.
Google had balked and threatened last year to stop displaying snippets and thumbnail photos in its search results but French regulators said in April that the company was likely abusing its dominant position. Google argued it shouldn't have to pay because news companies benefit from the millions of readers it sends to their websites.
The company also unsuccessfully argued that the competition watchdog overstepped its authority.
Google has at the same time been in more narrowly focused talks on digital copyright with French newspapers and said a day earlier it's on the verge of reaching 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."
News companies had pushed for the EU copyright reform amid worries that quality journalism is on the decline as ad revenue gets siphoned off by the digital giants.
Google and Facebook are also facing pressure in Australia, which wants to make them pay for using news content. Meanwhile, Google said last week it would pay publishers in Germany, Brazil, Argentina, Canada and the U.K. $1 billion over the next three years for their news as it seeks to defuse tensions with the industry.
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