This move is obviously motivated by politics and business. Berlusconi basically runs Italy like a corporation that he owns, and since he controls 90% of Italian media his interests don't align with sites such as youtube, Reddit, Digg, etc. that pose a threat to his business. What he's doing is what any (heartless..) savvy businessman would do: Cut out the competition. Of course this is absolutely terrible for Italian democracy and free speech.
It is also personal. Berlusconi has a huge, and still growing, number of legal problems. He successfully hides them on the media he owns or controls (6 tv channels out of 7). The few newspapers that are not aligned to his policy are read by an handful of people. The only way truthful news about his misbehavior reach the Italian people are social network and similar. So it makes sense to shut them up.
And this could be the Berlusconi response to such claim:
"The left wing it's trying to ruin the country by make non-sense claims". If you watch the Italian television, you can see that he appends that sentence on every response.[Disclaimer: I'm not right/center/left/you-name-it winged]
It's simple, really. Italy profits from being connected to the internet more than it costs them, so they'll do the right thing eventually.
This goes for any country that wants to control / regulate the internet that gets a substantial portion of their telecommunications via the net.
If Djibouti or Upper-Volta would decide to legalize stuff like this they could get away with it because the public outcry would be relatively small, if they do it in Italy then whichever political party was the one to make that decision will find themselves without any power at the next elections.
I would take this with a substantial grain of salt. Less than a week ago Italy's prime minister suggested that Israel should join the EU:
I kind of wonder if Google might get fed up and ditch their Italian office. Recently I also read this attack piece in the Corriere della Sera, which is usually a reasonable paper:
Italian only, but basically the guy has it in for Google and the fact that they get paid in Ireland, in Europe, and thus avoid some of the fun and exciting Italian taxes and regulations, and thinks they should be subject to a number of inane rules that the local companies cooked up to split up the publishing market amongst themselves.
Yeah, especially as online-publishing is a freedom of speech issue and unless Berlusconi rescinds Italy's membership in the European Union, he'd have to be able to prove that essentially banning access to free-speech online isn't a violation of freedom of speech European Court of Human Rights. Any judgement by the court is wholly binding on the member states and legally has to be complied with or they can ultimately be forced out of the EU, but would likely be subject to sanctions and receive no 'rebate' from the taxes their citizens pay to the EU.
Being forced out of the EU would mean all their citizens working in the EU, outside of Italy, could potentially lose employment immediately due to not having work visas. Every Italian citizen living in the EU would have 6-months to return to Italy, and by how most immigration policies work they would be unable to apply for a work visa or even citizenship within their country of occupation. The exact same would happen to any EU citizen living in Italy, which could potentially be devastating for the economy in Italy.
In the EU Italy is not exactly first on the list of 'markets' that you think of when starting out.
First off, the UK & Germany, then France, Spain, Scandinavia, Benelux, then Italy, and Greece. Switzerland usually gets pulled in alongside Germany and France with the portion of the country that only speaks Italian to come along when Italy goes in, Austria usually around the time that Germany is done. That's simply a consequence of the amount of business done online and the size of the populations of those countries.
Former eastblock countries usually follow last, but there is a shift happening there, they definitely figure higher in the consciousness of start-ups today than they did even 3 years ago.
The short answer is no - unless they depend on Italian cusomers (or bank via Italy). The longer answer depends on Italy's relative sway with the EU versus your 'home' nation & the significance of what you're doing, but is a qualified 'no'.
It's nothing personal - only business.