WASHINGTON -- In an important Internet law test case, a District of Columbia federal district court has declared that the Commodity Futures Trading Commission cannot legally require publishers of commodity-related analyses -- including nonferrous metals online newsletters--to register with . the agency.
"It is a slam dunk," said. the lawyer for the plaintiffs in the case, Scott Bullock of the nonprofit libertarian legal defense fund, Institute for Justice. "We won on all fronts and the judge did not make a distinction between the Internet and more traditional publishing."
The CFTC had been attempting for a couple of years to require electronic publishers of commodity-market analyses to register as commodity advisers with the agency, arguing that special consumer protections were needed for the dissemination of futures market analyses over interactive media. The CFTC argued that the information -- electronic as well as traditional commodity-market newsletters and software analyses publishers provide -- is similar to what brokers provide.
A group of publishers and consumers of online content, software, books and newsletters that assist people in analyzing commodity and futures markets sued the agency, arguing that the provision violated their constitutional rights to free speech.
In his decision, the judge in the case, Ricardo Urbina, said that the application of the registration requirement was an attempt by the agency "to regulate speech, not a profession."
One of the litigants, Stephen Briese, publisher of the Tallahassee, Fla.,-based Bullish Review, said that he had suffered economic loss by not expanding his business and often tempered his opinions because of fears of CFTC retribution.
Briese's newsletter is typical of other Internet-based commodities business-to-business publications in that a single analyst or small publisher issues it. The journal covers' all of the commodities markets, including copper, gold, silver, platinum and palladium, with about 750 subscribers worldwide -- ranging from professional money managers to individual traders -- and is disseminated on the Internet and by fax.
Though the decision applies to all forms of publishing -- both traditional and electronic -- the CFTC had been focusing enforcement primarily on Internet and software publishers. And with electronic publishing laws still in the developmental stages, the case has been watched closely, according to Internet law observers.
The CFTC has not yet decided whether to appeal the case.
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