A Paris court has found internet giant Google guilty of violating copyright by digitising books and putting extracts online, following a legal challenge by major French publishers.
The court ruled against Google's French unit after the La Martiniere group, which controls the highbrow Editions du Seuil publishing house, argued that publishers and authors were losing out in the latest stage of the digital revolution.
Google was ordered to pay €300,000 in damages and interest and to stop reproducing any copyrighted material by French publishers.
A lawyer for the popular search engine said it would appeal, but Friday's ruling will be enforced immediately pending any further court action.
"We believe giving online users access to very short extracts from works is in line with copyright," Google lawyer Benjamin du Chauffaut said. "French online users will be the only ones deprived of a great part of their literary heritage."
La Martiniere, the French Publishers' Association and authors' groups SGDL had argued that Google was exploiting that heritage, and called scanning an act of reproduction. They had demanded the US company be fined €15 million .
The publishing houses accused Google of scanning the books free of charge, letting users browse the content for free, reaping revenues from advertisers but not adequately compensating the creators and original publishers of the works.
As electronic readers gain popularity and online libraries expand, companies and governments are keen to learn from the mistakes that the film and music businesses made when their content moved online.
French politicians including president Nicolas Sarkozy have been particularly vocal, pushing for a broader public digitisation programme that would be partly funded through a big national loan.
Google has so far scanned 10 million books through partnerships with libraries in its ambitious project to put the world's literature online. It displays searchable snippets of books in copyright and whole texts of out-of-copyright works.
"Google Books gives access to a greater number of works and therefore contributes to marketing," Google lawyer du Chauffaut said.
The project has been praised for breathing new life into out-of-print works but has attracted more than one lawsuit for scanning books without permission from rights holders.
Google recently reached a settlement in the United States after lengthy negotiations with authors and publishers led by the US Authors Guild who had sued it. The settlement, which includes measures to track down and compensate authors, only covers books published in North America, Britain and Australia, and any books registered with the US Copyright Office.
It still has to be approved by a US court before it comes into force.