Okja, a €60-million creature feature about a young country girl who tries to save a beast created by an unscrupulous multinational company, had been touted as a possible winner of the festival's top prize, the Palme d'Or.
But a bitter row between the streaming giant and French cinema owners may have already put it, and the other film purchased by Netflix, "The Meyerowitz Stories" with Adam Sandler and Ben Stiller, out of contention.
Netflix sparked uproar in France by refusing to put the movies on general release there, where subscription services must wait three years to stream films after they show in cinemas.
Spanish director and jury president Pedro Almodovar dropped a bombshell Wednesday by suggesting they should not win anything.
He said he could not imagine "the Palme d'Or nor any other prize being given to a film, and then not being able to see that film on a large screen".
But his fellow jury member Hollywood star Will Smith took a strongly opposing view, singing Netflix's praises to reporters.
'Slam my hand on table'
Moments before Almodovar made his declaration, Smith told French TV that he was not afraid of a fight and was "looking for the opportunity to slam my hand on the table and disagree with Pedro. I'm looking forward to a good jury scandal".
Netflix boss Reed Hastings took to Facebook last week to praise Okja as an "amazing film" and accused the French "establishment of closing ranks against us".
The battle -- which has divided film-makers -- has prompted French directors and producers to appeal to their government to change streaming rules.
Actress Robin Wright, star of Netflix's flagship TV series "House of Cards", said Thursday that films were best seen in cinemas.
"We are getting criticised right now because we have never had this medium before. The movie theatre will forever be the first choice for films. I think it is actually really poor for people to watch films on their phones. It is not fair to filmmakers."
Okja director Bong Joon-Ho, who has been compared to "Steven Spielberg in his prime" by Quentin Tarantino, won fans worldwide for his 2006 monster blockbuster The Host.
The South Korean's first Hollywood film, Snowpiercer, starring Tilda Swinton -- who also appears in Okja -- won him further kudos in 2012.
Bong told reporters that the new film "is essentially a love story between the animal and the little girl".
"But it also looks at how our lives are inevitably shaped under the capitalist system, whether you are a human or an animal," he added.