In February 2010 the Court delivered its decision to convict three of the defendants, although it has not delivered the reasons for its decision. The conviction was for failure to comply with the Italian privacy code. As far as I can tell, Google complied with all its obligations under the Directive, so either Italian law is not in compliance with the Directive, or we're missing some important background information here.
Google has indicated it will assist the employees to appeal the decision as a matter of law, but it is also troubled about the policy implications that may flow. As I said in 2009 "If this case was successful then it would probably mean the end of user content on the Internet in Italy." Or, as Google said today:
If that principle is swept aside and sites like Blogger, YouTube and indeed every social network and any community bulletin board, are held responsible for vetting every single piece of content that is uploaded to them — every piece of text, every photo, every file, every video — then the Web as we know it will cease to exist, and many of the economic, social, political and technological benefits it brings could disappear.