President Emmanuel Macron wants to make France a leader in regulating US tech giants and containing the spread of illicit content and false information on the most-used platforms.
"What is not tolerated on the street should not be tolerated on the internet," said Laetitia Avia, a member of Macron's majority at the National Assembly and author of a recent report on hate speech told reporters before the vote.
Facebook has come under intense scrutiny in recent years over hate speech, especially after a gunman killed 51 people in New Zealand in March and streamed the attack live.
The massacre prompted the country's prime minister Jacinda Ardern to initiate a so-called "Christchurch Call," named after the city where the gunman attacked two mosques.
Facebook, which was not immediately reachable for comment, has recently agreed to hand over the identification data of users suspected of hate speech on its platform to judges in France, a minister told Reuters last week.
It has also restricted rules for broadcasting live video on its platform after the killings at Christchurch.
Under the French draft law, social media groups would have to put in place tools to allow users to alert them to "clearly illicit" content related to race, gender, religion, sexual orientation or disability.
In the event a network fails to react in due course and/or offer the necessary means to report such content, they could face fines up to 4% of their global revenues.
France's broadcasting regulator, CSA, would be responsible for imposing the sanctions and a dedicated prosecutor's office would be created.
The French bill looks more draconian than the one passed in 2018 in Germany, under which local authorities can impose fines of up to EUR50 million (US$56 million) on sites that fail to remove hate speech promptly.
The bill now passes to the senate and will go back and forth between the two houses until they both agree on the text. If they fail to do so, the lower house will have the final word.
