A Syrian refugee whose image showed up in fake news reports linking him to terrorism lost a closely watched case in Germany that sought to prevent Facebook from allowing users to repost the picture.

The refugee, Anas Modamani, became a potent symbol of the wave of migrants flooding into Germany, and of the country's immigration policy when he posed for a selfie with Chancellor Angela Merkel in 2015. But the image surfaced in social media posts falsely linking him to terrorist attacks in Brussels and on a Christmas market in Berlin, prompting Modamani to seek an injunction against Facebook in a court in Wurzburg, in the southern German state of Bavaria.

The case, one of several against Facebook in Germany, was viewed as an important indicator of how the country's stringent laws on personal privacy will be applied to social media companies. It also raised questions about whether those companies should be treated as data providers, and whether they should follow stricter media laws or even new legislation.

The rise of fake news and populist propaganda has prompted broader concerns ahead of German elections in September. A government-led task force, which includes representatives from Facebook, Google and Twitter, is looking into how such companies deal with posts deemed hateful.

In the case on Tuesday, Judge Volkmar Seipel ruled that there were no grounds for an injunction because Facebook had not in any way manipulated the content, which would have made it legally responsible for the distribution. The judge added that a host provider, according to the European Union's electronic commerce laws, could be held responsible for eliminating content from its site only when it was considered technically possible.

Facebook had argued that it was not possible to search the entire contents of its site. Modamani's lawyer disagreed. "This question was disputed by the parties and could not be clarified in the hearing," the judge said, suggesting it could be answered in a separate trial if pursued.

Modamani, who lives in Berlin, was not present at Tuesday's announcement and declined to comment on the ruling. His lawyer, Chan-jo Jun, said that although some of the altered images remained available on Facebook, the attention the trial generated had resulted in a drop in threats against Modamani since late December.

Jun, however, arrived at the court flanked by two police officers. He said the security detail had been ordered after an anonymous call several weeks earlier in which the person threatened to murder him and cited information that Jun said only an insider could have known.

"We learned a lot from this case," Jun said after the ruling. "People have learned that Mr. Modamani is not a terrorist. We lawyers have learned that we cannot help victims of libel and slander with the laws we have. But we have learned which laws have to be changed."

The post at the centre of the dispute, which has been shared at least 940 times on Facebook since it was first posted on December 27, claims that Modamani was one of three men suspected of setting fire to a sleeping homeless man in Berlin. It shows a copy of Modamani's original selfie with the chancellor, alongside images of the three men. Above the pictures, in German, the post reads: "Homeless man set alight in Berlin. Merkel took a selfie with one of the perpetrators."

The post remains in circulation on Facebook, although Jun said that he had reported it as recently as Monday through the channels the company provides. In response to a request to take down the photograph, Facebook replied that it did not violate user guidelines, the lawyer said.

"We appreciate that this is a very difficult situation for Mr. Modamani," Facebook said in a statement. "Regarding the ruling, we are pleased that the court shares our view that the legal action initiated was not merited or the most effective way to resolve the situation."

"We quickly disabled access to content that has been accurately reported to us by Mr. Modamani's legal representatives," the statement added, "and will continue to respond quickly to valid reports of the content at issue from Mr. Modamani's legal representatives."

Jun had previously tried to file a separate suit against Facebook for violating a German law that prohibits publication of seditious comments by extremists. A court in Hamburg rejected that suit last year, but a court in Munich is examining it.

Jun said that one goal of the trial was "to find out and demonstrate whether it is possible, under existing laws and Facebook's approach to compliance, to effectively protect personal privacy."

The German Constitution guarantees a right to the "free development of the individual," which is understood to include the right to personal privacy and to determine the extent to which a person appears in public. Jun has argued that Facebook is failing to uphold German law, instead adhering only to its own guidelines.