By EVAN RAMSTAD
SEOUL – A South Korean judge ruled Monday that a blogger who was arrested after criticizing government economic policies was not guilty of spreading false information, the latest step in the country's struggle to balance freedom of speech with the potentially damaging effects of anonymous online postings.
In his ruling, Seoul Central District Judge Yu Young-hyun found that Park Dae-sung, a 30-year-old, unemployed man from Seoul who posted economic articles on a Korean web site under the pseudonym "Minerva," didn't write to "intentionally harm the public interest."
The judge found that Mr. Park, a junior college graduate, didn't understand some of the things he was writing about, including currency exchange processes. But he rejected prosecutors' claim that a posting by Mr. Park on Dec. 29 led to a downward spiral in the value of the South Korean won.
Mr. Park gained notoriety for a posting in early September in which he predicted Lehman Brothers would collapse. Lehman's difficulties were widely known at the time, but fans of Mr. Park's writing and local newspapers gave wide attention to the prediction after the investment bank's failure in mid-September.
His use of a pseudonym prompted widespread guessing about his identity and background. Some people believed he was an investment banker or government official with inside information about the South Korean financial system. Mr. Park's identity was revealed after his arrest in January.
Prosecutors, who sought an 18-month prison sentence for Mr. Park, said they would appeal the ruling. Mr. Park was released from jail after the ruling and told local reporters that he would continue to write online.
The ruling is the latest development in South Korea's effort to cope with online anonymity. In 2005, South Korean lawmakers created a so-called "real name" law to counter online bullying, invasion of privacy and the spread of false information. It required people to use their real names in e-mail, online forums and blogs or register their names with Internet portal companies in order to use a pseudonym.
Anonymous and pseudonym-based postings helped fuel anti-government protests last year and have been blamed for the suicides of numerous people, including a handful of prominent actresses.
The 2005 law is being tested in several court cases. Last Thursday, the South Korea Supreme Court ruled that Internet portals are responsible for deleting defamatory and malicious comments on their Web sites, even if the person being criticized hasn't complained.
The latest phase of the law recently took effect and extended the real-name rules to lesser-visited portals such as Google Inc., which gets relatively little traffic in South Korea compared to local competitors such as NHN Inc.'s Naver. Google this month disabled the ability of South Koreans to post comments on its Korea-based Web sites, including videos to YouTube.
—Hyongki Park contributed to this article.Write to Evan Ramstad at evan.ramstad@wsj.com