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Week in Review

TOP 10 STORIES / Feb. 26-March 2

March 04, 2001|Jube Shiver Jr. and James Bates and Meg James and Chuck Philips and Carol J. Williams and Edmund Sanders and Karen Alexander and Melinda Fulmer and Marc Ballon | TIMES STAFF WRITERS

1. Judges Challenge Microsoft Breakup Decision: A federal appeals court reviewing the Microsoft Corp. antitrust case signaled that it is unlikely to uphold a breakup of the software giant for violating state and federal antitrust law. During a hearing before the U.S. Court of Appeals for the District of Columbia, several judges said the sweeping antitrust case brought against Microsoft by the Justice Department, 19 states and the District of Columbia was short on evidence and was tainted by controversial comments the trial judge made after he ordered Microsoft's breakup. In June, U.S. District Judge Thomas Penfield Jackson ruled in favor of the government and ordered Microsoft split in two. But questions and comments from four of the seven judges indicated they might scale back the government's case, remove Jackson from overseeing it and send the dispute to another judge for additional proceedings.

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2. Writers, Studios Halt Talks: Setting the stage for a crippling strike in Hollywood this summer, writers and major studios abruptly broke off contract talks Thursday after nearly six weeks because the sides had failed to resolve differences over pay issues. The 11,000-member Writers Guild of America will continue to work under a contract that runs through May 1, but the collapse of the latest round of negotiations served to heighten the most tense labor period in Hollywood in more than a decade. Proof of just how far apart the writers and studios remain was evident from their conflicting versions of the studios' offer.

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3. Love Sets Major Battle With Music Industry: Courtney Love rocked the record industry with a lawsuit designed to radically alter the way it does business. Love contends her action against Vivendi-owned Universal Music Group will expose corrupt accounting practices used by major music companies to hide profits and cheat artists out of royalty payments. The suit also cites a California law, as yet untested in the music business, to challenge the industry's tradition of long-term contracts that keep artists tied up for years longer than is legal in other industries. Love is seeking to break a contract she and her band, Hole, signed with now-defunct Geffen Records in 1992, a contract that Universal inherited after a series of acquisitions. She may be the first artist to challenge the industry's standard contract who has the financial muscle to withstand a lengthy court battle.

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4. Greenspan Holds Back: During two appearances on Capitol Hill last week, Federal Reserve chief Alan Greenspan declined to give Wall Street what it most wants: a sign that the central bank will lower interest rates before its next policy meeting March 20. The result was another lousy week for tech stocks. The Nasdaq composite index lost 6.4% for the week, closing Friday at its lowest level since December 1998. Broader indicators fared a bit better. The S&P 500 ended the week down 1% after twice crossing into official bear-market territory--a 20% decline from its March 2000 peak.

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5. DaimlerChrysler Reveals Losses, Turnaround Plan: DaimlerChrysler executives disclosed $269 million in fourth-quarter losses, the first red ink to stain the global company since it was created in 1998. The company also said it will book a $2.8-billion restructuring charge this quarter to finance a Chrysler turnaround and may take nearly $1 billion more later this year, dragging down the 2001 profit outlook. The disclosures brought fresh cause for second-guessing the wisdom of marrying the vaunted Mercedes with free-falling Chrysler. The company's German strategists detailed an ambitious turnaround plan to restore Chrysler to profitability within a year and shore up another overseas partner, Mitsubishi Motors Corp. of Japan. Facing a second straight year of losses and declining consumer confidence after decades of covering up safety defects, Mitsubishi will eliminate 9,500 jobs--14% of its work force.

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6. Cable Operators Win in Court: A federal appeals court handed the cable industry a victory by tossing out rules that prevent operators from controlling more than 30% of the national market. The decision came just 10 days after the U.S. Supreme Court let stand a lower court decision that upheld constitutionality of the 1992 law that spawned the controversial 30% ownership rule. Together, the rulings mean that the government has the power to restrict cable-industry consolidation but that the regulations drafted by the Federal Communications Commission were flawed and must be revised. AOL Time Warner Inc. and AT&T Corp. have been fighting to overturn the FCC rules since 1994, saying the agency exceeded its authority and imposed arbitrary ownership caps that violated their free-speech rights.

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