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Week in Review

TOP STORIES -- May 25-30

June 01, 2003|From Times Staff

Microsoft and AOL

Settle Netscape Lawsuit

Microsoft Corp. will pay AOL Time Warner Inc. $750 million to settle an antitrust lawsuit alleging that the software giant unfairly crushed AOL's Netscape Web browser. In the settlement deal, the rivals also agreed to collaborate on digital media initiatives to thwart piracy.

Seen as a victory for both companies, the agreement resolves the biggest corporate fight over the demise of Netscape, one of the main issues of the federal antitrust suit Microsoft settled last year.

Under the agreement, Microsoft will extend AOL's right to use Explorer in its Web service for seven more years, free of royalties. And AOL will be able to use Microsoft's Media Player 9, which gives greater control than earlier versions of the video and music player over how content can be displayed and stored.

Executives at the companies said they hoped the collaboration on digital-rights mechanisms would speed content delivery and cut the use of peer- to-peer networks that let users swap pirated content for free.


Banks Win High Court

Decision on ATM Fees

The U.S. Supreme Court handed the banking industry a final victory in its 3 1/2-year battle with the cities of Santa Monica and San Francisco over automated teller machine fees.

The court refused to hear an appeal of lower court rulings that overturned laws the two cities passed in 1999 to bar banks from charging for use of their ATMs by customers of other institutions.

Bank of America Corp., Wells Fargo & Co. and the California Bankers Assn. had sued to challenge the laws, which the lower courts threw out on grounds they conflicted with federal banking rules.

BofA and San Francisco-based Wells Fargo have national banking charters issued by the U.S. Office of the Comptroller of the Currency, whose regulations permit banks to charge ATM fees to non-customers.

Backers of the laws and consumer groups expressed disappointment at the outcome of the case.


Markets' Spring Rally

Picks Up Pace Again

After a brief pause, Wall Street's spring rally resumed last week as investors began piling into stocks rather than risk being left behind.

The Standard & Poor's 500 index jumped 3.3% for the week while the Nasdaq composite index bounced 5.7%. The gains came on the heels of a down week that had snapped a five-week winning streak for both indexes. The Dow Jones industrial average, meanwhile, added 2.9% last week.

All three gauges also posted gains for May, their third straight winning month. That hasn't happened since late 2001.

The rally came despite several tepid economic reports. Analysts said investors were buoyed by the recent federal tax cut, which reduces taxes on both dividends and capital gains.


Insurer Sues to Block

Potential State Takeover

Infighting over the fast-deteriorating workers' compensation system in California took a new turn when officials of the workers' comp insurer of last resort announced they have sued the state Insurance Department to thwart a potential takeover.

The lawsuit, filed by the State Compensation Insurance Fund, is the latest salvo in an intensifying battle between Insurance Commissioner John Garamendi and operators of the public, nonprofit fund that controls more than half of the California workers' comp insurance market.

The lawsuit was filed late Tuesday in San Francisco County Superior Court.

Garamendi has been highly critical of State Fund management in recent months, warning repeatedly of a looming financial meltdown at the insurer. State Fund officials insist their institution is fundamentally sound and that meddling by the Insurance Department would only add to the turmoil roiling the California workers' comp market.


Tenet Healthcare's

CEO Steps Down

Jeffrey C. Barbakow, Tenet Healthcare Corp.'s chief executive for the last decade, resigned from the Santa Barbara-based company, which has been hard hit by government investigations of its hospitals.

Trevor Fetter, Tenet's 43-year-old president, assumed Barbakow's duties. Tenet said it was looking for a permanent replacement, and Fetter is regarded as a strong candidate.

Tenet has been on a downward spiral since last fall, when a federal investigation was launched into its practice of boosting profit with special payments that Medicare makes for the sickest patients.

In a message to employees, Barbakow, 59, said, "I know that the new management will do what is necessary to restore Tenet to its rightful position of leadership in the health-care industry."


BofA and Wells Fargo

Challenge 'Opt In' Laws

In a preemptive strike against proposed financial-privacy laws, lawyers for Bank of America Corp. and Wells Fargo & Co. asked a federal judge to block cities and counties from limiting how banks can share customers' information with telemarketers.

The banks and supporters of the local laws in Northern California made their arguments before U.S. District Judge Claudia Wilken in Oakland, who didn't issue an immediate ruling.

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