MILAN (Reuters) - A Milan court convicted three Google Inc executives on Wednesday for violating the privacy of an Italian boy with autism by letting a video of him being bullied be posted on the site in 2006.
Google, which will appeal the six-month suspended jail terms in Italy, also heard that European Union antitrust regulators were looking into complaints about it from three online firms.
Google said it was confident it would avoid formal investigation by the European Commission.
It said the Milan verdict "poses a crucial question for the freedom on which the Internet is built" as none of its employees had anything to do with the video.
"They didn't upload it, they didn't film it, they didn't review it and yet they have been found guilty," said Google's senior communications manager, Bill Echikson, in Milan.
The U.S. embassy in Rome backed Google, saying in a statement that it was "disappointed" by the decision and seeming to draw an analogy with limits on Internet freedoms in China.
"We disagree that Internet service providers are responsible prior to posting for the content uploaded by users," it said. "Secretary of State Hillary Clinton made clear on January 21 (with regard to China) that a free Internet is an integral human right that must be protected in free societies."
The court convicted senior vice-president and chief legal officer David Drummond, former Google Italy board member George De Los Reyes and global privacy counsel Peter Fleischer. Senior product marketing manager Arvind Desikan was acquitted.
The executives, none of whom are based in Italy, do not face actual imprisonment as the sentences were suspended, while an appeals process in Italy can take many years.
They were not in Italy for the hearing. Drummond is based in California, Fleischer in Paris and Desikan in London, while De Los Reyes has since retired, Echikson told Reuters.
Google plans to discuss the ruling with European policy makers, a person close to the company told Reuters, as was first reported in the Wall Street Journal.
The complaint was brought by an Italian advocacy group for people with Down's Syndrome, Vivi Down, and the boy's father, after four classmates at a Turin school uploaded a clip to Google Video showing them bullying the boy.
Vivi Down was a plaintiff because it was named by the boys in the video, a lawyer for the group said. But Google's Echikson and the prosecutor said on Wednesday the boy had autism, not Down's as widely reported during the three years of the case.
"A company's rights cannot prevail over a person's dignity. This sentence sends a clear signal," public prosecutor Alfredo Robledo told reporters outside the Milan courthouse.
The video was filmed with a mobile phone and posted on the site in September 2006.
Google argued it removed the video immediately after being notified and cooperated with Italian authorities to help identify the bullies and bring them to justice.
It says that, as hosting platforms that do not create their own content, Google Video, YouTube and Facebook cannot be held responsible for content that others upload.
Drummond said in a statement the verdict "sets a dangerous precedent" and meant "every employee of any Internet hosting service faces similar liability." He said the law was clear in Italy and the European Union that "hosting providers like Google are not required to monitor content that they host."
Fleischer said if employees were "criminally liable for any video on a hosting platform, when they had absolutely nothing to do with the video in question, then our liability is unlimited."
The prosecutors accused Google of negligence, saying the video remained online for two months even though some Web users had already posted comments asking for it to be taken down.
Censoring of Websites has become a hot issue in Italy in recent months, following a spate of hate sites against officials including Prime Minister Silvio Berlusconi.
The government briefly studied plans to black out Internet hate sites after fan pages emerged praising an attack on the premier, but the idea was dropped after executives from Facebook, Google and Microsoft agreed to a shared code of conduct rather than legislation.
Google counsel Julia Holtz said the scrutiny by EU antitrust regulators "in all likelihood ... will not go anywhere. The Commission has not expressed any hint of guilt."
The Commission can fine companies up to 10 percent of their revenues and has imposed billions of euros of fines on Intel Corp and Microsoft Corp for breaking antitrust rules, although it was far too early to say if Google could be fined.
Google said British price comparison site Foundem and French legal search engine ejustice.fr had complained its search algorithm demoted their sites in results and Microsoft-owned Ciao from Bing had complained about its terms and conditions.
Google has 90 percent of the global search market compared with 7.4 percent for Yahoo Inc and Bing combined, according to November data from research firm StatCounter. The company has drawn increasing regulatory scrutiny as it has grown.
Additional reporting by By Foo Yun Chee in Brussels, Emilio Emilio Parodi, Eleanor Biles, Gavin Jones; writing by Stephen Brown in Rome; editing by Charles Dick and Andre Grenon