Collective punishment went out of fashion a long time ago, and besides, that's exactly what would play in to the hands of Berlusconi et al.
Google simply will appeal this and hopefully the appeal judge will be more sensible, if they're not the time for drastic measures may come but the fall out from that will be wildly unpredictable and it will hurt a lot of people that have nothing to do with this.
Actually, collective punishment is anything but out of fashion. Trade embargoes, for example, punish the whole population of countries instead of just the responsible people in the government.
I don't agree that such actions are too aggressive. In the era of South African apartheid, Western disinvestment campaigns played a role in eliminating the system, and they were supported by Mandela and the ANC.
Even individual organizations can have an impact. Mandela believes that the University of California's disinvestment of 3 billion dollars was particularly helpful.
Not that things are that dire in Italy, but I think it's quite reasonable for Google to take public actions suspending the hosting or distribution of content in Italy. It's exactly what the court asked them to do -- stop distributing content unless they can ensure they have the permission of everyone involved.
That's a fair point. Sanctions seem to be relatively useless against despotism (North Korea, Cuba, Iraq).
However, South Africa was an advanced democratic capitalist state, and its stability depended on links with the Western capitalist system. Italy is probably even more vulnerable to such pressure.
Google simply will appeal this and hopefully the appeal judge will be more sensible, if they're not the time for drastic measures may come but the fall out from that will be wildly unpredictable and it will hurt a lot of people that have nothing to do with this.