French unions representing rugby, football, basketball and handball players had filed a complaint against the rule at the European Court of Human Rights (ECHR), saying it violated the right to respect for private and family life.
The complaint was rejected on Thursday, the ECHR said in a statement.
It said that the judges accepted the rule had an impact on the athletes' private lives but "took the view that the public interest grounds which made it necessary were of particular importance and justified the restrictions" on their freedom.
The rule requires targeted athletes to file information on where they will be for at least one hour of every day to allow drug testers to locate them for random out-of-competition tests.
WADA director Olivier Niggli said in a statement that out-of-competition tests were "one of the most powerful means of deterrence and detection of doping."
"Accurate whereabouts information is crucial to the success of anti-doping programs," he said.
"The only way to perform out-of-competition testing is by knowing where athletes are, and the way to make it most effective is to be able to test athletes at times when cheats are most likely to use prohibited substances or methods."
He said that the inconvenience caused to athletes was "entirely proportionate to the wider benefits for global sport."
WADA added that athletes were allowed to make two mistakes with their whereabouts information before they were considered to have committed a violation and only a relatively small number were subject to the rule.
(Writing by Brian Homewood; Editing by Amlan Chakraborty)
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