According to The New York Times, an Italian court has convicted three Google executives of violating privacy laws for allowing a 2006 video of students bullying an autistic boy to air on the now-defunct Google Video site.

David Drummond, Google’s senior vice president and chief legal officer; Peter Fleischer, Google’s chief privacy counsel; and George Reyes, the company’s former chief financial officer, were sentenced to six months in prison. As The Wall Street Journal reports, the three don’t face extradition or jail timebecause Italy automatically suspends prison sentences of less than three years.

The ruling sets a legal precedent in Europe as to whether Internet companies can be held legally liable for content that is posted on video sites by third parties. BusinessWeek quotes Greg Sterling, an analyst at Sterling Market Intelligence, as saying:

It’s a bad decision. It sets a bad precedent. The individuals didn’t have any control over the private parties involved in the underlying dispute.

Certainly, as V3.co.uk notes, David Drummond agrees:

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 positions at Google, every employee of any Internet hosting service faces similar liability.

Google is no stranger to privacy issues. Its Street View service has drawn the ire of many, including Switzerland, which announced plans to sue Google for failing to obscure faces, license plates and other sensitive images. More recently, Google Buzz is creating a fair amount of rancor. The Electronic Privacy Information Center has filed a complaint with the U.S. Federal Trade Commission claiming that Google Buzz violates user privacy.