AFP, which is based in Paris, said the Google News service infringes on its copyrights by reproducing information from the Web sites of subscribers of the world's oldest international news agency.
The issues raised by the case have profound implications for the Internet, where anyone can be a publisher and Web journals, or blogs, are becoming more frequent destinations for seekers of news.
The lawsuit's outcome may likely hinge on whether the No. 1 search engine can persuade the courts that Google News constitutes permissible "fair use" of copyright material.
Legal scholars say Google could argue that it adds value by significantly improving the news-consuming experience without greatly harming AFP's ability to sell its service.
But in seeking at least $17.5 million in damages, AFP says Google adds little because its news site looks much like those of AFP subscribers, albeit one where software and not human editors determine the placement of stories on a page.
The U.S. District Court in Washington, where the lawsuit was filed last week, will ultimately have to balance a search engine's desire to give consumers convenience, selling ads in the process, and copyright owners' rights to control their works.
"The story [of the Internet] from Day 1 has been one of waves of liberation followed by attempts at control," said Jonathan L. Zittrain, a Harvard law professor. "It's rightly up to the courts and the government to figure out where the lines should be drawn."
It's possible, though, for the courts to skirt key issues given Google's promise this week to remove the AFP items in question, though technically that's not something that can be done overnight.
AFP lawyer Joshua J. Kaufman said the lawsuit would nevertheless proceed because damage already has been done.
The Google News service, which debuted in 2002, scans some 4,500 news outlets and highlights the top stories under common categories such as world and sports.
Many stories carry a small image, or thumbnail, along with the headline and the first sentence or two. Visitors can click on the headline to read the full story at the source Web site.
Yahoo Inc. has a similar service, though it uses human editors and pays some news sources, including AFP and the Associated Press, for rights. Google wouldn't comment on any similar financial arrangements.
Google spokesman Steve Langdon said Web sites can request removal, though most "want to be included in Google News because they believe it is a benefit to them and their readers."
In fact, AFP's own Web site includes a "robots.txt" file that spurns search engines, essentially telling them to avoid indexing its news pages.
However, the case is complicated by the fact that the stories come not directly from AFP but from its subscribers, some of whom might want the rest of their sites indexed to generate ad-boosting referrals.
The fair-use argument will likely draw upon a 2002 appeals court ruling that thumbnail images serve a different, transformative function as compared with full-size originals - and thus constitute fair use.
A 1985 Supreme Court ruling on a non-Internet copyright dispute found that small excerpts might constitute infringement if they represent the heart of the work. AFP argues that the headline and the first sentence of a story constitute such an essence.
"They capture the reader's attention and describe what the rest of the article is about," the lawsuit said.
However, facts cannot be copyrighted, and Google may have a claim on such citations if they are mostly based on facts and not expression, said Fred von Lohmann, an attorney with the Electronic Frontier Foundation, a civil liberties group in San Francisco.
He said a ruling against Google also could harm the free exchange of ideas on blogs, which often mention news stories and have links to them.
The AFP case is not the only lawsuit challenging a search engine's practices. A Web site that sells nude photos of women has sued Google, accusing it of distributing links and passwords. Several companies also have sued Google and others over the use of trademarks as keywords for triggering a rival's ads.