The law comes after the thorny issue reared its head at this year's Venice Film Festival, where several films came from US streaming giants Netflix or Amazon, including the festival's Golden Lion winner "Roma".
Mexican director Alfonso Cuaron's movie was the first by Netflix to win a major festival prize. Thanks to its festival success, it will start being released in theatres around the world on November 21 and then on Netflix on December 14.
In contrast, France's Cannes Film Festival opted only to accept films with a guaranteed cinema release, in a bid to protect theatres.
French law says there must be a 36-month interval between when a film is shown in theatres and when it can be shown by a streaming or Subscription Video on Demand (SVOD) service.
The result is that streaming producers have to wait 36-months before being able to show their films on their own platform, if they also show them in cinemas.