The Justice Department said yesterday that it has hired an investment advisory firm for assistance in analyzing the financial impact of antitrust sanctions it may recommend against Microsoft Corp.
The department said it has retained Greenhill & Co. of New York, a small but prominent mergers and acquisitions firm headed by Robert F. Greenhill, who has served as president of Morgan Stanley & Co. and chairman of Smith Barney Inc.
Justice said in a statement that Greenhill would assist the government in studying the "full range" of remedies in the case. The sanctions under consideration by the department include limits on the company's behavior, a corporate breakup and a requirement that Microsoft share the software code that makes up its dominant Windows operating system for personal computers.
A federal judge last month ruled that Microsoft has used its monopoly power with Windows to stifle competition and hurt consumers. The judge, Thomas Penfield Jackson, still must decide whether the company has violated antitrust laws and, if so, what sanction to impose. In the interim, the government and Microsoft have agreed to engage in settlement negotiations with the assistance of a mediator selected by Jackson.
Legal specialists said the department's hiring of Greenhill suggests a strong desire to push for a "structural" remedy such as a breakup. "This is the kind of thing you do only if you're serious about a breakup," said George Washington University law professor William E. Kovacic. "You don't need Greenhill's advice to tell you about the impact of making Microsoft rewrite its contracts. You need his help to help design a blueprint for the restructuring of the company."
A Justice Department official said that no decision has yet been made on remedies and that the hiring of Greenhill "does not indicate what we're likely to recommend in court or elsewhere."
"We expect that the firm's advice will be useful in connection with all ongoing processes," the official said.
A Microsoft spokesman would not comment directly on the government's announcement other than to say that the company believes "it's premature to talk about remedies at this stage."
"There's a long way to go," Microsoft spokesman Jim Cullinan said. "We believe that at the end of the legal day our actions will be seen as pro-consumer and pro-competitive."
Greenhill & Co. advises companies considering mergers and acquisitions and also is involved in real estate investment banking. Greenhill, 63, founded the company in 1996 after leaving Smith Barney. His firm advised Compaq Computer Corp. in its $3 billion acquisition of Tandem Computers Inc. in 1997. Greenhill & Co. also has recently advised oil company Tenneco Inc. and broadcasting firm Chancellor Media Corp.