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Supreme Court: Game on!

10:31pm EDT

Mature video games are shown in this photograph taken in Encinitas, California, June 27, 2011.

Credit: Reuters/Mike Blake

WASHINGTON (Reuters) - Governments cannot ban the sale or rental of violent video games to minors because it would violate free-speech rights, the U.S. Supreme Court said on Monday in its first ruling in a video game case.

By a 7-2 vote, the high court struck down a California law, which also imposed strict video game labeling requirements, as unconstitutional. It said video games, like books, plays and movies, deserve free-speech protection.

The ruling was a victory for video game publishers, distributors and sellers, including the Entertainment Software Association. Its members include Disney Interactive Studios, Electronic Arts, Microsoft Corp and Sony Computer Entertainment America.

Michael Gallagher, the trade association's president, hailed the ruling as a "historic and complete win" for free-speech rights and "the creative freedom of artists and storytellers everywhere."

The Supreme Court's majority opinion written by Justice Antonin Scalia rejected California's argument that violent video games should be banned just like the sale of sexually explicit material to minors.

Scalia also rejected the argument by California lawmakers who cited studies that suggested violent video games can be linked to aggressive and anti-social behavior in children.

Leland Yee, a California state senator and the law's author, criticized the ruling. "The U.S. Supreme Court is supposed to take care of the people of this country. They have failed miserably, particularly our children, with this particular defeat," the Democrat from San Francisco said.

California's 2005 law has never taken effect because of the legal challenge. At issue were popular video games such as Warner Bros. Entertainment Inc's "Mortal Kombat" and Take-Two Interactive Software Inc's "Grand Theft Auto."

The law defines a violent video game as one that depicts "killing, maiming, dismembering or sexually assaulting an image of a human being." Retailers who sold or rented a violent video game to a minor could be fined as much as $1,000.

The U.S. video game industry makes about $10.5 billion in annual sales. More than two-thirds of U.S. households include at least one person who plays video games, according to industry statistics.

Six other states have adopted similar laws and all had previously been struck down in court.

SAME BEHAVIOR FROM WATCHING CARTOONS

Scalia said the state's expert testified he found the same effects when children watched television cartoons starring Bugs Bunny or the Road Runner or viewed a picture of a gun.

Scalia cited famous books for children throughout history that have depicted violence.

"Grimm's Fairy Tales, for example, are grim indeed," he said with examples of Snow White's poisoning, Cinderella's evil stepsisters having their eyes pecked out by birds and Hansel and Gretel killing their captor by baking her in an oven.

Scalia said parents, not the government, should decide what games their children can buy and play. He said the video game industry has a rating system designed to inform consumers and store owners which games were violent.

Justices Clarence Thomas and Stephen Breyer dissented.

"What sense does it make to forbid selling to a 13-year-old boy a magazine with an image of a nude woman while protecting a sale to that 13-year-old of an interactive video game in which he actively, but virtually, binds and gags the women, then tortures and kills her?" Breyer asked.

Parents Television Council President Tim Winter denounced the decision, saying, "Retailers can now openly, brazenly sell games with unspeakable violence and adult content even to the youngest of children."

But John Riccitiello, CEO of Electronic Arts, a major video game publisher, said, "Everybody wins on this decision. The court has affirmed the constitutional rights of game developers; adults keep the right to decide what's appropriate in their houses; and store owners can sell games without fear of criminal prosecution."

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Protesters gesture during a demonstration after Friday prayers in Tahrir square in Cairo, May 27, 2011.

Credit: Reuters/Mohamed Abd El-Ghany

WASHINGTON (Reuters) - The Obama administration is leading a global effort to establish "shadow" Internet and cellphone systems to help dissidents undermine authoritarian governments, the New York Times reported on Sunday.

The effort has quickened since former Egyptian President Hosni Mubarak's government shut down the country's Internet in the last days of his rule, said the Times report, which cited planning documents, classified diplomatic cables and sources.

The Internet has been used in recent months by anti-government protesters in North Africa and the Middle East to help coordinate demonstrations. Some governments have responded by disabling Internet access.

In one project, the U.S. State Department and Pentagon have spent at least $50 million to create an independent cellphone network in Afghanistan using towers on military bases in the country, the Times said, citing unnamed U.S. officials.

The operation is aimed at counteracting the Taliban insurgency's ability to shut down official Afghan services, the Times said.

The State Department is also financing creation of stealth wireless networks to enable activists to communicate beyond the reach of governments in countries like Iran, Syria and Libya, the Times said, citing participants in the projects.

Another project focuses on development of an "Internet in a suitcase" that could be smuggled across a border and deployed to allow wireless communication with a link to the global Internet, the Times reported.

Secretary of State Hillary Clinton is backing the U.S. effort, according to the report.

"We see more and more people around the globe using the Internet, mobile phones and other technologies to make their voices heard as they protest against injustice and seek to realize their aspirations," the Times quoted Clinton as saying in an email response to a query on the subject.

U.S. diplomats also are meeting with operatives who have been burying Chinese cellphones near the border with North Korea, where they can be dug up and used to make furtive calls, the Times reported.

(Writing by Paul Simao; Editing by Eric Beech)

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WASHINGTON (Reuters) - The International Monetary Fund is investigating a cyber attack on its computer systems, an IMF spokesman said on Saturday, the most recent incident of computer hackers breaching security at high-profile institutions.

"The fund is fully functional," said IMF spokesman David Hawley. "I can confirm that we are investigating an incident. I am not in a position to elaborate further on the extent of the cybersecurity incident."

Bloomberg News reported the IMF's computer system was attacked by hackers "believed to be connected to a foreign government, resulting in the loss of e-mails and other documents."

Bloomberg, which said the attack occurred before the arrest of former IMF Managing Director Dominique Strauss-Kahn on May 14, did not identify the country thought to be involved.

An official with the World Bank, the IMF's sister institution in Washington, said the IMF had cut its network connection with the World Bank out of "caution."

"The World Bank Group, like any other large organization, is increasingly aware of potential threats to the security of our information system and we are constantly working to improve our defenses," said World Bank spokesman Rich Mills.

The IMF, which has sensitive information on the economics of many nations, was hit during the last several months by what computer experts described as a large and sophisticated cyber attack, The New York Times reported.

The newspaper said the IMF's board of directors was told on Wednesday about the attack.

Internal IMF memos obtained by Bloomberg warned employees to be on their guard.

"Last week we detected some suspicious file transfers, and the subsequent investigation established that a Fund desktop computer had been compromised and used to access some Fund systems," said a June 8 email obtained by Bloomberg to employees from Chief Information Officer Jonathan Palmer.

"At this point, we have no reason to believe that any personal information was sought for fraud purposes."

The incident comes when attacks on computer systems are on the rise -- especially ones targeting major companies and potentially compromising government security and customer information. Recently, there have been major attacks on defense contractor Lockheed Martin, Citigroup Inc, Sony Corp and Google .

The attack on Lockheed involved compromising its "SecurID" electronic keys issued by EMC's Ltd RSA Security division.

SecurIDs are widely used electronic keys to computer systems, designed to thwart hackers by requiring two passcodes: one that is fixed and another that is automatically generated every few seconds by the security system.

The IMF is seeking a new head following the resignation of Strauss-Kahn after he was charged with the sexual assault of a New York hotel maid.

(Reporting by Lisa Shumaker and Leslie Wroughton; Editing by Peter Cooney and Todd Eastham)

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