FEDERAL RESERVE
Banks ordered to cut retailers’ debit-card fees
The Federal Reserve said Wednesday that banks can charge retailers only 21 cents each time they swipe a debit card.
The board raised the cap from its initial proposal of 12 cents per swipe, which banks and big payment processors such as Visa and MasterCard said was too low to cover the cost of handling transactions, maintaining networks and preventing fraud.
Banks currently have no limit and charge an average of 44 cents per swipe.
The Fed voted 4-1 to adopt the rule, which was required under the financial regulatory law enacted last year. Elizabeth Duke opposed the rule. It takes effect Oct. 1, later than expected.
It was “one of our most challenging rulemakings” under the financial regulatory law, Fed Chairman Ben S. Bernanke said Wednesday. The Fed will monitor developments in the debit card market “on an ongoing basis” to gauge if it’s accomplishing the intended goals, he said.
SOCIAL MEDIA
Specific Media wins MySpace fire sale
LOS ANGELES — News Corp. has sold struggling social networking site MySpace for $35 million, mostly in stock — a fraction of what News Corp. paid for the site six years ago.
The sale to online advertising network operator Specific Media closed late Wednesday, a day before the end of News Corp.’s fiscal year. News Corp. will maintain less than a 5 percent stake in the company.
News Corp. bought MySpace for $580 million in 2005, but users and advertisers have fled the site for hotter social networks such as Facebook and Twitter.
The deal and details were first reported by the Associated Press, citing “a person familiar with the matter.” Specific Media confirmed the acquisition but not the terms of the deal later Wednesday.
PATENTS
Kodak ready for dispute with smartphone makers
ROCHESTER, N.Y. — Innovation turned Eastman Kodak Co. into one of the world’s most recognizable brands. Imitation by its rivals might help keep the picture-taking pioneer from fading into history.
The 131-year-old company, which popularized photography beginning with the Brownie box camera in 1900, is looking for a lucrative patent-infringement triumph this week over iPhone behemoth Apple Inc. and BlackBerry maker Research in Motion Ltd.
A hoped-for Kodak moment before a trade-dispute arbiter would at least temporarily ease the intensifying pressure on the maker of cameras, film and printers. Kodak, slow to phase out its 20th-century cash cow of celluloid film, is still trying to redefine itself as a 21st-century powerhouse in digital imaging.
The company’s dispute with Apple and RIM centers on technology Kodak patented in 2001 for extracting a still image while previewing it in the camera’s LCD screen. CEO Antonio Perez estimates that Kodak could get up to $1 billion from the two companies over the life of the patent if Kodak gets a favorable ruling Thursday before the U.S. International Trade Commission in Washington.
WHOLESALERS
Private-equity investors to acquire BJ’s Club
NEW YORK — BJ’s Wholesale Club is being acquired by two private equity investors for roughly $2.8 billion in a widely expected deal.
The nation’s third-largest wholesale club said Wednesday that Leonard Green & Partners and CVC Capital Partners will pay $51.25 per share in cash for BJ’s common stock. That’s a 6.6 percent premium over Tuesday’s closing price of $48.08.
The two private equity firms disclosed the bid earlier this month, though the value was unreported at the time. BJ’s said in February that it was exploring a sale. Analysts say the takeover could help propel its growth.
BJ’s said its board unanimously approved the buyout and is recommending that shareholders vote for it. The deal is expected to close during the fourth quarter.
From wire dispatches and staff reports
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