The court is taking action against YouTube after a Brazilian Muslim group filed a suit, the AP said.
The video clip, which mocks the Prophet Muhammad, has been condemned by Secretary of State Hillary Clinton and other top U.S. officials.
YouTube has blocked the video in Egypt, Libya, India and Indonesia in light of the violent protests, according to Reuters.
But that's not the only trouble facing YouTube's business in Brazil. A judge from the Mato Grosso do Sul state in Brazil has called for the arrest of the head of Google's operations in the country after the site refused to take down two videos attacking a mayoral candidate, the AP reported. Brazil has stringent laws restricting the type of content critics can air on TV about a candidate before an election, the AP said.
A Google spokesman said the company plans to fight the court's decision.
“We are appealing a court’s decision to remove a video from YouTube because, as a platform, we are not responsible for the content uploaded to our site,” the Google spokesman said in an email to The Hill.