An Italian court has convicted three Google executives in a trial over a video showing an autistic teenager being bullied.
The Google employees were accused of breaking Italian law by allowing the video to be posted online.
Judge Oscar Magi absolved the three of defamation but convicted them of privacy violations.
The UK's former Information Commissioner Richard Thomas said the case gave privacy laws a "bad name".
The three employees, Peter Fleischer, David Drummond and George De Los Reyes, received suspended six-month sentences, while a fourth defendant, product manager Arvind Desikan, was acquitted.
David Drummond, chief legal officer at Google and one of those convicted, said he was "outraged" by the decision.
Jane Wakefield, BBC News technology reporter
The guilty verdict has left Google outraged and much of the net community concerned about the ramifications
If firms can be held liable for every piece of content on their site they would face a nigh-on impossible job of policing and vetting everything before publication.
Many question how the Italian prosecutors decided which employees to target and most agree the four it settled on were random choice with none living in Italy or having direct responsibility for the video in question. George De Los Reyes was Google's chief financial officer but no longer even works for the firm.
Google says it has no plans to pull out of Italy and that it will vigorously appeal the case.
At the moment there is no indication that a similar case could or would be brought in any other European country.
Italy does seem determined to pursue such cases though and similar ones are ongoing against other net giants, such as eBay, Yahoo and Facebook. Its motives in pursuing such cases are less clear.
"I intend to vigorously appeal this dangerous ruling. It sets a chilling precedent," he said.
"If individuals like myself and my Google colleagues who had nothing to do with the harassing incident, its filming or its uploading onto Google Video can be held criminally liable solely by virtue of our position at Google, every employee of any internet hosting service faces similar liability," he added.
Peter Fleischer, privacy counsel at Google, questioned how many internet platforms would be able to continue if the decision held.
"I realise I am just a pawn in a large battle of forces, but I remain confident that today's ruling will be over-turned on appeal," he said.
Richard Thomas, the UK's former information commissioner and consultant to privacy law firm Hunton & Williams, said the case was "ridiculous".
"It is like prosecuting the post office for hate mail that is sent in the post," he told BBC News.
"I can't imagine anything similar happening in this country. The case wasn't brought by the Italian equivalent of the information commissioner but by criminal prosecutors and we don't know their motives.
"I find it worrying that the chief privacy officer who had nothing to do with the video has been found guilty. It is unrealistic to expect firms to monitor everything that goes online."
The verdict is likely to have ramifications for content providers around the globe.
Google said at the trial that pre-screening all YouTube content was impossible.
The video at the centre of the case was posted on Google Video in 2006 shortly before the firm acquired YouTube.
Prosecutors argued that Google broke Italian privacy law by not seeking the consent of all the parties involved before allowing it to go online.
Google's lawyers said that the video was removed as soon as it was brought to its attention and that the firm also provided information on who posted it.
As a result four students were expelled from their school in Turin, northern Italy.