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TechnologyDaily Mobile
Stocks, Not Sex, Fuel Online Free-Speech Fight
Web sites dedicated to pork belly and soybean trading may seem a far cry from on-line pornography. But a recent court ruling against the Commodity Futures Trading Commission may have struck a greater blow for freedom of speech on the Internet than high-profile cases involving online sex and decency laws.
Washington federal district judge Ricardo Urbina granted three financial publishers the right to post information concerning commodity futures on the Internet, without first registering with the CFTC— a process that includes fingerprinting and turning over subscription lists to the government agency.
The Web sites in question provide advice, commentary, and analytic software that help users navigate the high-risk futures market. The publishers said they considered mandatory registration demeaning, expensive, and detrimental to their business in which they closely guard the names of the clients who purchase the high-priced commentaries and tools. CFTC lawyers had argued, however, that the publishers were commodity-trading advisors and therefore subject to regulation just like the actual traders of stocks, bonds, and commodities.
Software makers and developers of online content are likely to cheer the decision because it may help clarify a familiar legal issue: As a form "speech" that can be commercial, political, and scholarly in nature, does software enjoy Constitutional protection?
"There is no question that the decision has far-reaching implications for Internet users and the software industry," said Chip Mellor, president of the Institute for Justice, a libertarian public-interest law firm that provided legal defense for the three plaintiffs suing the CFTC. "These forms of communication are protected speech. The sweeping rationale of protecting the public would not justify licensing and interference in these forms of speech."
In ruling for the publishers, whose Web sites include Frank Taucher's Supertrader, Robert Minor's Dynamic Trading Group, and Steve Briese's Bullish Review, Judge Urbina ruled that the CFTC's licensing scheme constituted a prior restraint on speech— which comes with a "heavy presumption against constitutional validity," he said, citing The New York Times' famous Pentagon papers case.
"There comes a point where government legislation crosses the line between the regulation of a profession and the regulation of speech," Urbina wrote in his June 21 decision in Frank Taucher v. Brooksley E. Born, the former head of the CFTC.
Judge Urbina also dismissed the trading commission's contention that because the sites had advertisements for themselves, they deserved the lesser First Amendment protections accorded to "commercial speech." Mellor called that argument "profoundly dangerous to free speech." Indeed, Institute for Justice attorneys argued in the trial that the publishers of commercial newsletters should enjoy no fewer First Amendment rights than does The Wall Street Journal , simply because the preponderance of articles in both sorts of publications are devoted to commercial subjects.
CFTC attorneys had contested that claim, too, arguing that the publishers were commodity trading advisors that "fall within a category of speech with an intermediate level of First Amendment protection," according to their legal brief. The agency had no further comment on the ruling, said a spokesman, adding that it had until August 20 to decide whether or not to appeal.
Mellor, whose Institute has often taken legal cases challenging occupational licensing requirements in the off-line world, said that the decision helps chip away at the legal barrier between commercial versus political speech. While the Supreme Court has historically been more deferential toward "political speech" because of its role in fostering the free flow of ideas, the court's current majority has increasingly recognized the First Amendment rights of businesses to advertise their wares.
In an information age in which databases housing everything from Usenet messages to EBay auction bids are increasingly valuable commercial tools, that kind of legal protection may prove vital, especially if government agencies continue their consideration of how to regulate dispersal of medical, legal or other professional advice on-line. Among the agencies and bodies likely to take action against Web publishers in the name of consumer protection are the Food and Drug Administration, the Federal Trade Commission and state bar association committees.
Some groups already have flexed their muscles against software publishers. In a case that stirred widespread passion in Texas earlier this year, a state committee devoted to stamping out the "unauthorized practice of law" sought to eliminate a desktop software product that helped consumers draft wills. Although they succeeding in having a district court ban Quicken Family Lawyer on April 9, popular outrage at the decision — and at lawyers — prompted the state to enact a measure legalizing the sale of books, software, and Internet sites devoted to legal self-help. The measure passed the Texas House 138-2 and the Senate 26-4, and an official for the state committee said it has given up its quest. The software went back on sale on June 29.
"The public is not going to tolerate being told what they can and can't read," said David Schenck, a Dallas lawyer representing Parsons Technology, which owns the software package in question, originally developed by Quicken maker Intuit. "The tide is not moving in their direction," he said of the state's unauthorized practice of law committee after an appeals court lifted the ban.
Lawyers at the Institute for Justice said that their case sets an important precedent limiting such software bans in the future – and were preparing to intervene in the Texas case.
"If the notion is upheld that the publication of software is not so much a matter of speech, but of professional activity done under licensing boards, that could totally change the way software has developed," said Scott Bullock, the Institute's lead attorney in the commodities futures case.
"The CFTC is saying that you have to seek our approval" to publish on a subject matter whose practice is regulated by their agency, Bullock said, noting that the agency aggressively sought the broadest possible jurisdiction over the Internet. "It is really two different worldviews about whether you see the Internet as a wonderful innovation providing incredible access to information, or whether you view new technologies as something the potential for more harm than good."
But one legal expert, evaluating the CFTC and Quicken decisions, cautioned that software and Web sites might be subject to different levels of legal protection depending upon their degree of customization or their ability to mimic human-like interactions.
"Look at it as a continuum with a book about how to write a will being clearly protected, and advising in person or by phone clearly constituting professional advice," said UCLA acting law professor Eugene Volokh. "Imagine an expert program that asks questions and offers diagnoses. I do think that would be licensed in the way a lawyer or doctor would be licensed."