YouTube is "a priori not responsible for the content of videos posted on its website" and "is under no obligation to control the content of videos posted online," said the ruling by the Tribunal de Grande Instance, a civil court that adjudicates major cases.
The court ordered the national private TF1 channel and its affiliates, which had sued YouTube, to pay 80,000 euros ($100,000) in court costs.
TF1 had sued YouTube in 2008 after various videos were posted on the website, including television shows and interviews to which the channel said it had commercial rights.
The channel had accused YouTube of unfair competition, saying it had profitted from the videos at TF1's expense.
The court rejected the argument, saying the channel failed to show any loss of sales.
YouTube France hailed the decision, with chief Christophe Muller saying the ruling "represents a victory for the Internet and for all those who use it to exchange ideas and information."
"This decision defends the right of innovation on content platforms generated by users, allowing them to do even more to help French artists and creators to reach new audiences in France and abroad," he said.
A spokesman for TF1 said the channel was surprised by the decision and was studying options to appeal the ruling.
Google bought YouTube in 2006 for $1.65 billion.