TOP STORIES -- Dec. 5-10
High Court to Consider Halting File Sharing
The Supreme Court, heeding the pleas of Hollywood studios and the record industry, agreed to consider calling a halt to file sharing on the Internet that allows millions of computer users to obtain free copies of music and movies.
Legal experts say the case, due to be decided in the spring, could prove to be the most important test of copyright law in the computer era. If the court decides to impose new restrictions on computer and electronics firms, it could crimp the innovation that has expanded the public’s control over music, film and other forms of entertainment.
At issue is whether owners of copyrighted works can stop software makers from giving computer users the means to make their own copies of those works.
Owners of the Grokster and Morpheus file-sharing networks say they are not liable for the actions of those who use their software to download movies or music. That argument prevailed before a federal judge in L.A. and the 9th Circuit Court of Appeals.
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California Payrolls Show Sharply Lower Gain
California’s employers added only 8,700 net jobs last month, the state reported -- yet another sign that companies are reluctant to hire aggressively even as the recovery gains endurance.
The gain was sharply lower than the revised jump of 42,400 jobs in October, the Employment Development Department reported. However, the state’s unemployment rate declined to 5.7% from 5.8% in October. And some economists said the report undercounted the true number of jobs being created here.
Analysts cited several factors to explain the lackluster job report. Employee benefits costs remain stiff. Employers aren’t seeing expected savings in their workers’ compensation premiums. Costs for energy and other commodities have risen, but many employers can’t pass along those higher costs to customers.
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OPEC to Cut Output to Keep Oil Prices Up
OPEC agreed to reduce its daily oil output by 1 million barrels and reserved the right to cut deeper early next year if crude gets cheaper.
But skeptical traders pushed oil prices below $41 a barrel for the first time since July.
The move by the Organization of the Petroleum Exporting Countries is intended to prevent further revenue losses amid falling prices, without creating the kind of volatility that have lifted prices. If effective, the reduction would scale back output to 27 million barrels a day, the group’s official production ceiling.
Saudi Oil Minister Ali Ibrahim Naimi said the cut would be implemented Jan. 1.
In trading Friday, light sweet crude for January delivery dropped $1.82, or 4.3%, to $40.71 a barrel on the New York Mercantile Exchange.
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China’s Lenovo to Buy IBM’s PC Business
China’s Lenovo Group said it was buying the personal computer business of IBM Corp., an American icon that pioneered the PC market. The $1.25-billion purchase would catapult Lenovo into the world’s third-largest seller of PCs, giving it an internationally recognized brand and access to IBM’s technical and management capabilities.
Lenovo would pay IBM $600 million in cash and $650 million in stock, IBM Chief Financial Officer Mark Loughridge said.
Lenovo agreed to keep the business based in the U.S. and run by the current management team. IBM would keep an 18.9% stake in the business.
The move away from PCs would reduce IBM’s revenue, Loughridge said, but the sale would “also eliminate the volatility associated with the cyclical PC business.”
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Martha Stewart to Make TV Comeback on NBC
General Electric Co.’s NBC Universal and Martha Stewart Living Omnimedia Inc. announced plans to roll out next fall an hourlong daytime TV show hosted by Martha Stewart and produced by “reality” TV king Mark Burnett.
Stewart is serving a five-month prison sentence at the Alderson Federal Prison Camp in West Virginia. She still is appealing her obstruction-of-justice conviction.
Susan Lyne, newly named president and chief executive of Martha Stewart Living, said the show would be taped live before a studio audience.
As part of his arrangement with Martha Stewart Living, Burnett was given the right to buy 2.5 million company shares at $12.59 each.
NBC Universal is expected to air the show on its 14 owned stations five days a week and next month will begin selling the show to other station groups.
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Grocers Agree to Settle Janitors’ Lawsuit
Three major supermarket chains have agreed to pay $22.4 million to settle a class-action lawsuit by janitors who said they were illegally classified as subcontractors and systematically underpaid at hundreds of Southern California stores.
The money will be split among at least 2,100 janitors who worked at Albertsons Inc., Ralphs Grocery Co. and Safeway Inc.’s Vons supermarkets from 1994 to 2001. Payouts will be about $4,500 to $9,300, attorneys said in court.
Attorneys representing the supermarkets declined to comment.
The settlement ends a five-year case. U.S. District Judge Percy Anderson in Los Angeles put off the final hearing until late February because Albertsons had failed to post notices in its stores seeking class members.
The posting could add more janitors to the settlement but won’t increase the pool of money.
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Kelso Said to Be Leading Bidder for Shell Refinery
New York investment firm Kelso & Co. has emerged as the leading bidder for Shell Oil Co.’s Bakersfield refinery, people familiar with the situation said.
Kelso and others have been talking to Shell about buying the facility for several months. Shell signed an agreement pledging to negotiate exclusively with the equity firm, the sources said. A Shell spokesman declined to comment. Kelso executives didn’t return a call for comment.
It was unclear what price and terms were under discussion, though one person said Shell continued to insist on keeping ownership of a few assets integral to operating the refinery.
For a preview of this week’s business news, please see Monday’s Business section.
