Mark Zuckerberg, other digital execs discuss regulation of the Internet at e-G8

Policymakers such as Sarkozy say the blistering pace of growth has often left regulators behind. He said a "balance" needed to be struck to prevent misuse of the Internet — such as to protect children online — while boosting its potential as a driver for economic growth.

While praising the executives, he said regulatory curbs are needed.

"Don't let the revolution that you've begun threaten everyone's basic right to a private life and full autonomy," said Sarkozy. "Full transparency ... sooner or later runs into the very principle of individual freedom."

Google's Schmidt said technological changes have led to a "shift in power" toward individuals — whether to illegally release secret documents or transfer copyrighted material, or rally against their repressive regimes.

"My own opinion is that most governments are having trouble with that shift in power," he said. "So rather than sort of complaining about it, which is what everybody does, why don't we see if we can harness it?"

During an e-G8 panel talk, Schmidt said: "You want to tread lightly on regulating brand new, innovative industries. ... Clearly you need some level of regulation for the evil stuff. But I would be careful about overregulating the Internet.

"I cannot imagine any delegate in this conference (who) would want Internet growth to be significantly slowed by a government that slows it down because of some stupid rule that they put in place," he said.

Last week, the U.N.'s independent expert on freedom of speech said governments that curtail users' access to the Internet are violating a basic human right — regardless of the justification.

Britain last year joined France by announcing it would cut off Internet access to people who illegally download copyright-protected material. The French government has so far issued only warnings under the "three strikes" formula for possible penalties.

Privacy concerns have also raised hackles in Europe.

In January, Facebook and German officials reached a deal over unsolicited invitations sent to nonmembers of the social networking site through its "Friend Finder" feature — which allows Facebook to send email invitations to potential users through current members' address books.

The feature came under fire in Germany for violating privacy laws by allowing unauthorized access to information of third parties. The agreement allows Facebook members more control over the email addresses they share.

Johannes Caspar, a data protection official in Hamburg who negotiated the deal for the Germans, said American laws under which Facebook operates tend to be more laissez-faire than those of Europe about privacy issues.

He said Facebook has cooperated with German investigations about possible privacy law violations, and the onus now is on Europe "to make things clearer" about the rules companies face on the continent.

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