PARIS - In a landmark ruling affecting legally uncharted Internet territory, a French judge on Monday ordered the U.S.-based portal Yahoo! to block Web surfers in France from an auction where Nazi memorabilia is sold.
Judge Jean-Jacques Gomez gave Yahoo three months to find a way to prevent users based in France from accessing pages on auctions.yahoo.com that feature nearly 2,000 Nazi-related objects, such as swastika-emblazoned flags and daggers.
After the deadline, Yahoo would be fined $13,000 for each day it does not comply.
The decision capped a seven-month court battle initiated by anti-racism groups that accused the Santa Clara, Calif.-based company of violating French hate law and in which the trial judge called on leading technical experts to examine the feasibility of ''zoning'' the Internet.
Yahoo and free speech advocates say the case could set a dangerous precedent by granting one country the right to reach across borders and impose its laws on Web sites based in other nations.
A Yahoo attorney, Greg Wrenn, contended that France had no jurisdiction in the case and indicated his company would ignore the decision unless a U.S. court were to enforce it. He said Yahoo, the world's most popular Internet portal, would refuse to pay the fines.
''If we were targeting France we would have put the site in French,'' Wrenn said from Santa Clara.
''The French approach would lead to a lowest common denominator world where the most restrictive rules of any country would govern all speech on the Internet,'' said Alan Davidson, staff counsel with the Center for Democracy and Technology in Washington, D.C. ''What happens when the government of China decides to prosecute a human rights group in the U.S. for publishing dissident materials that are legal here but illegal there?''
Lawrence Lessig, a Stanford University Internet law scholar, called Monday's decision the clearest example to date of a free and sovereign nation setting rules for what content can be accessed from its soil.
''To the extent that governments insist on more of these types of control, freedom on the Internet will be restricted,'' he said.
The decision looks to augur the beginning of the end of what Harvard law professor Jonathan Zittrain called ''the pleasant anarchy of the Internet.''
Although experts agree it is technically impossible to completely block access to Web sites, software exists that allows sites to certify the origin of visitors and deny them access based upon a computer's registered location. That software is only expected to get better and cheaper with time.
Monday's ruling also highlights the difficulties of developing an international Internet legal code for cyberspace, given nations' differing policy imperatives. The European Union is currently drafting such a code.
France, which lost tens of thousands of its citizens to the Holocaust, has strict laws aimed at squelching racist expression. It is illegal here to display or sell racist material.
The advocacy groups that sued Yahoo! - the Union of Jewish Students and the International Anti-racism and Anti-Semitism League - argued a moral high ground in the case, saying the French have a right to be shielded from the commercialization of Nazi objects.
Laurent Levy, a plaintiffs' lawyer, called the decision exemplary and said it ''resolves the question of borders on the Internet.'' Lawyer Michael Traynor, who filed an affidavit on behalf of Yahoo!, said the ruling allowed France to ''extraterritorially enforce its notions on the rest of the world.''
In May, a French judge ordered Yahoo! to pay $1,000 to each of two anti-racism groups that sued, ruling that the Internet company had offended the nation's ''collective memory.''
The judge also ordered Yahoo! to find ways to block French users from its sites selling Nazi paraphernalia or other Yahoo! sites with content deemed to be racist.
The court's decision Monday confirmed the initial ruling.
During the trial, Yahoo!'s lawyers argued that blocking the site from the French would be technically impossible.
The Net has no borders, they said, and there is no effective way to prevent the Net's users from traveling where they like.
Internet experts testified, however, that it was possible to keep some French Web surfers from seeing the sites. Following the experts' recommendation, the Paris court said it was possible for Yahoo! France, the company's local subsidiary, to block at least 90 percent of French users from the sites in question.
The panel of specialists said it would be relatively easy to identify and bar users who accessed the Internet through French providers but that identifying those Web surfers who use huge international service providers such as America Online would be more difficult.
They also said that users who want to get around the filtering system could find ways to do so.
The advocacy groups that sued Yahoo! have said the company is trying to evade its moral responsibility by arguing that it is impossible to keep French users off the sites in question.
''There is no technical debate,'' said Stephane Lilti, lawyer for the Union of Jewish Students. ''Just a political debate.''