Andy Hall, who lives in Thailand, has faced a cascade of legal actions for co-authoring a 2013 report on a Natural Fruit factory in the south of the country, alleging poor working conditions, low wages and child labour.
Natural Fruit, a major supplier to the European drink market, brought the action against Hall.
The activist "was found guilty of defamation and under the computer crime act... the court sentenced him to four years in jail, reduced to three," his lawyer Nakhon Chomphuchat told AFP after the verdict, adding that the sentence was suspended.
Rights groups say criminal defamation and computer misuse laws are routinely used to stifle investigative work.
The contentious report -- "Cheap Has a High Price" -- was published by the Finnish civil rights group Finnwatch.
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It heaped pressure on Thailand's food industry which has faced years of allegations of mistreatment of its mainly migrant labour force.
Natural Fruit has denied the allegations in the report and has also launched a civil case seeking $10 million in damages.
Hall, who said he will appeal the verdict, stands by his research and has accused the company of trying to detract from the report's damning findings through legal action.
Speaking ahead of Tuesday's ruling, Hall railed at the use of laws "by powerful interests... to silence people who are doing this kind of activism."
The president of Natural Fruit was in unforgiving mood after the ruling.
"No foreigner should think they have power above Thai sovereignty," said company president Wirat Piyapornpaiboon, accusing Hall of "violating his rights".
Hall was acquitted by a court last year on a separate defamation charge pursued by Thailand's Attorney General.
Finnwatch argue that their organisation should have been sued if Natural Fruit disagreed with their report rather than going after Hall personally.
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