France was wrong to give Herve Eon a 30-euro (£26; $39) suspended fine for waving an abusive placard when Mr Sarkozy was in Laval, north-western France, in 2008, the court said.
The abuse, repeating words that Mr Sarkozy himself had used previously, was a crude version of “get lost!”
Mr Eon was not awarded compensation.
His 30-euro fine had been suspended in a Laval court ruling in November 2008. He was found guilty of insulting the president under France’s 1881 Freedom of the Press Act.
The European Court said the penalty imposed had been “disproportionate” and violated Article 10 of the European Convention on Human Rights, which safeguards freedom of expression.
A court press release said such action by the authorities was “likely to have a chilling effect on satirical contributions to discussion of matters of public interest, such discussion being fundamental to a democratic society”.
Mr Eon, a Socialist activist, had waved a small placard reading “Casse-toi, pauv’con” – which the European Court translated as “get lost, you sad prick”.
Mr Sarkozy, who led the centre-right UMP party, was defeated in the May 2012 presidential election by Socialist rival Francois Hollande.
Mr Sarkozy had said “Casse-toi, pauv’con” earlier in 2008 in response to a farmer who had refused to shake his hand at an agricultural show. His use of the crude phrase provoked a flood of comment in the media.
Courtesy of BBC