The European Court of Human Rights compared the 2001 crackdown to acts of torture and ordered Rome to pay €45,000 to a man who had filed a suit.
The man, aged 62 at the time, and dozens of other anti-globalization protesters lodged in a Genoa school during the summit were attacked by police during a nighttime raid.
Around 200 masked anti-riot police armed with batons and shields raided the Armando Diaz school complex shortly after midnight.
Several protesters were severely beaten up, suffering broken ribs and other serious injuries and were also subjected to physical and verbal abuse.
"Acts of violence took place after a police riot squad stormed the building to carry out a search," the court said in a statement.
It said there were "acts of torture sustained by the applicant" and added that "the Italian criminal legislation...was inadequate for the punishment of such acts and not an effective deterrent against their repetition."
Several policemen who were not actually involved in the raid were charged after the incident but got off with light sentences, the court said, adding that the actual perpetrators were never identified or brought to justice. Italy has three months to appeal the ruling.
The vast majority of the estimated 100,000 protesters in Genoa were peaceful but a small minority were intent on violence.