A Paris appeals court on Thursday upheld an order for Google to negotiate with media groups in a long-running dispute about revenues from online news.
The ruling came as the US internet giant announced it was close to a deal on compensating French media groups for news shown in Google search results.
Such a deal would represent a climbdown by Google, which has so far refused to comply with new EU rules giving more copyright protection to media firms for news displayed on search engines and social media.
France was the first European country to ratify the law, which could act as a lifeline to newspaper groups grappling with shrinking print sales.
In April, the French competition authority ordered Google to negotiate with the press in good faith -- a ruling it appealed, accusing the authority of overstepping its jurisdiction.
The appeals court sided with the competition authority.
Google argues it should not have to pay to display items produced by news companies since they benefit by receiving millions of visits to their websites.
But in a sign that the Californian company is anxious to do a deal, it announced late Wednesday that it made the French press an offer on copyright.
"We want to support journalism and ensure continued access to quality content for as many people as possible," Google France director Sebastien Missoffe said in a joint statement with French newspapers.
Struggling news outlets have long been seething at Google's failure to give them a cut of the millions it makes from ads displayed along with news search results.
AFP and other groups lodged a complaint against Google with the competition regulator last November, claiming the company was not negotiating in good faith to resolve the issue.
The main issue before the competition authority -- whether Google is abusing its dominant market position -- remains to be decided, in a ruling expected early next year.
France is not the only country where Google has come under pressure from the government to share their revenue with local media.
The Australian government has drafted a law to make Facebook and Google pay for news content they use.
To try to defuse the rows, Google announced last week that it would invest $1 billion in partnerships with news publishers worldwide to develop a "Showcase" app to highlight their reporting packages.
Chief Executive Sundar Pichai said Google had already signed up almost 200 publications in several countries, including Der Spiegel in Germany and Brazil's Folha de S. Paulo.
The list lacked any from the United States or France, but on Wednesday Google said the new service was part of the outline deal reached with the French press.