(ANSA) - Milan, February 24 - Three Google executives were found guilty here on Wednesday of invasion of privacy in a landmark case over a video posted in 2006 of an Italian teenager with Down's Syndrome being bullied in school.

Prosecutors said Judge Oscar Magi's ruling "means privacy rights trump business logic" while Google, which will appeal, called it "an attack on the fundamental principles of freedom on which the Internet was built". The first trial anywhere against executives of the Internet search engine company, the Milan case was seen as having implications for the way Google operates in Italy and for the wider debate over freedom of speech and legal responsibility for Internet postings.

Former Google Italy president David Carl Drummond, now senior vice president, was given a six-month suspended jail term along with George De Los Reyes, a retired former Google Italy board member, and Peter Fleitcher, Google Europe's privacy strategy chief.

The three, for whom prosecutors had asked a year's term, were found guilty of invasion of privacy but not of defamation.

Arvind Desikan, head of the Google Video for Europe project, was acquitted because he only faced the defamation charge.

The unidentified teenager who filed suit against the Google executives withdrew it in February.

Lawyers for the boy did not say why he had retracted the suit but he is thought to have reached an out-of-court settlement.

Despite the boy's action the trial continued because Milan city hall and the Italian Down's association Vividown stood as plaintiffs.

On Wednesday they were denied civil damages because the defamation charge was struck down.

In the smartphone footage, posted on September 8, 2006 and removed on November 7, 2006, the boy was seen being taunted, insulted and kicked by one student in particular as others looked on.

The location appeared to be a classroom and the people visible appeared to be about 16 years of age.

The video was posted in Google Italy's 'Most Fun Videos' section and got 5,500 hits in its two months on the Web.

Under Italian law, the alleged crime carries a penalty of up to three years in open court but convictions are normally lower in the case of the fast-track proceedings for which Google opted, which are closed to the press and public.

The convicted are entitled to two automatic appeals.

SENTENCE 'AGAINST EU DIRECTIVES'.

Google's lawyers, Giuliano Pisapia and Giuseppe Vaciago, welcomed the quashing of the defamation charge, saying it meant the prosecutors' thesis of "mandatory preventive censorship" had not been recognised.

But the lawyers said the ruling still "raises strong concern because it flies in the face of European Union directives and the most authoritative legal precedents in Italy and abroad".

Google Italy spokesman Marco Pancini said: "we will appeal against this decision which we consider surprising, to say the least, since our colleagues had nothing to do with the video in question".

"They didn't film it, they didn't post it and they didn't see it".

The three convicted "showed courage and dignity because the mere fact of being put on trial was excessive," Pancini said.

Shifting responsibility for postings, he said, undermines "the possibility of offering Internet services".

Prosecutors Alfredo Robledo and Francesco Cajani said they were "satisfied" because "business freedom can never neglect safeguards for human dignity, as this trial demonstrated".

They argued that "this was never a trial on Web freedom as some (experts) said".

The prosecutors hinted they might again contest the defamation charge, depending on what Magi says in his written ruling which must be released within two months. Throughout the trial, the defendants denied negligence, saying they could not have prevented the incident and stressing that the company took prompt action to identify the four bullies, who were expelled as a result.

The video was pulled as soon it was drawn to Google's attention, they said.

From the outset, Google expressed puzzlement over the case.

When the suits were admitted it called the decision to take the case to trial ''difficult to understand'' and said it set a ''worrying precedent''.

In June it said it would "continue to vigorously defend our employees" and stressed:''As we have repeatedly made clear, our hearts go out to the victim and his family.

''We are pleased that as a result of our co-operation the bullies in the video were identified and punished".