Microsoft reorgs legal team, lays out plan to ‘earn the public’s trust’ amid heightened tech regulation

Microsoft President Brad Smith. (GeekWire File Photo / Dan DeLong)

In a new memo obtained by GeekWire, Microsoft President Brad Smith laid out how the company plans to navigate increasing technology regulation across the globe as part of a four-year strategy called CELA 2025.

The memo, addressed to the company’s Corporate, External, and Legal Affairs department (CELA), outlines how Microsoft aims to “earn the public’s trust and adapt to the heightened expectations and expanded global regulation of the tech sector.” It also announced several new leadership changes as part of a reorganization (see more below).

Smith said Microsoft needs to adapt to new rules governing how tech companies conduct their business, rather than “fighting against it.”

“In part this is because we have been adapting for two decades to antitrust rules for a product like Windows, and we have learned from our experience,” he wrote. “While change is never easy, we believe it’s possible to adapt to new rules and innovate successfully and responsibly.”

Smith cited “proactive initiatives” that align with this mindset, pointing to new Windows 11 features announced last week such as a second app store for Android apps supported by Amazon, and more favorable terms for developers in its app store.

Microsoft plans to grow its legal affairs team by 20% over the next year to “build our regulatory capabilities ahead of the adoption of new laws,” Smith noted. There are currently 1,600 employees as part of the company’s CELA arm.

Tech giants are facing increased regulatory scrutiny around the world. Microsoft, however, has skirted some of the same criticisms that companies such as Amazon, Apple, Google and Facebook are facing — even as Microsoft’s market capitalization just hit $2 trillion for the first time and the company acquires other firms at a record rate.

For example, earlier this month U.S. lawmakers unveiled new antitrust legislation that could change the way large tech companies do business and dominate their respective marketplaces. The sweeping package includes a bill called the Ending Platform Monopolies Act that would allow the federal government to force companies to sell off lines of business. But Microsoft does not appear to be targeted.

“This is about the monopoly powers of the Big Four tech companies,” Seattle Congresswoman Pramila Jayapal, who introduced the act, told The Seattle Times in reference to Amazon, Facebook, Apple and Google.

Smith, who joined Microsoft in 1993, certainly has plenty of experience navigating antitrust regulations, including the landmark case against Microsoft more than two decades ago involving its Windows operating system.

Smith said new laws and regulations are coming not only for competition law, but across fields such as privacy, cybersecurity, artificial intelligence, digital safety, telecommunications, trade, consumer protection, accessibility, and environmental sustainability.

“The tech sector’s regulatory transition will not be easy,” Smith wrote in the memo. “Never has an industry had to adapt so quickly on a global basis to changes in so many legal fields. That’s why it’s so important that we get started quickly and decisively. We will need to build a capability across Microsoft that enables us both to comply with global regulations and innovate quickly.”

Here are the changes coming to Microsoft’s CELA organization:

  • Julie Brill, chief privacy officer, will continue to lead the Privacy and Regulatory Affairs (PRA) team. Microsoft is moving the teams for responsible AI, digital safety, accessibility compliance, and a new regulatory governance role into this team.
  • Tom Burt will continue to lead the Customer Security and Trust (CST) team. Microsoft is moving the team that addresses telecommunications regulations from PRA to CST .
  • Lisa Tanzi is being promoted to general counsel, leading a new Customer Experience & Policy team that will combine and integrate the CELA groups that support all the engineering and go-to-market groups across Microsoft.
  • Hossein Nowbar is being promoted to general counsel and corporate secretary for a new Corporate Legal Affairs team that will combine corporate legal groups.
  • Dev Stahlkopf is leaving to take a top legal position at another company after 14 years at Microsoft, most recently as general counsel and corporate secretary.
  • Lucas Joppa will continue leading the Environmental Sustainability team but will now report to Smith directly.
  • Kate Behncken will continue to lead Microsoft Philanthropies.
  • Teresa Huston will now lead Technology and Corporate Responsibility.
  • Shelley McKinley will become chief legal officer for GitHub.
  • Steve Clayton is joining CELA to lead the Public Affairs team.
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