In an era of government surveillance, vigilante data leaks, and cybercrime, how do technology companies strike the balance between the right to privacy, individual security, and national security? What new concerns arise from the fact that more and more individuals and companies are saving data in “the cloud”? And how does the net neutrality debate affect users and tech companies in a time when free and fast internet access is almost considered a fundamental right in the United States and globally?
Horacio Gutierrez, former international and business practice lawyer at Morgan Lewis, has been at the forefront of these questions and more as the general counsel of Microsoft, and he was recently named the next general counsel of Spotify, the online music streaming phenomenon that has been altering the music industry model in fundamental ways for the last 10 years.
Horacio took some time to speak with Alumni Relations about tackling the tough tech questions during his almost 18 years at Microsoft, his new role at Spotify, and his time at Morgan Lewis.
What is the focus of your current role as general counsel of Microsoft?
As general counsel, I lead the legal affairs department, which is a team of over 800 legal, regulatory, and corporate affairs professionals in 55 countries around the world. We provide the full range of legal counseling support, as well as litigation and mergers and acquisitions, and regulatory engagement support for the company’s businesses all over the world.
What have been your major challenges?
What is interesting about operating in this technology industry, and being a lawyer for a company that is constantly reinventing itself and entering into new areas, is that there is no shortage of challenges. Challenges tend to evolve over time, just as the business evolves and technology evolves, and as the policy of the law catches up—or tries to catch up—with the regulations.
I would say over the last few years, as I stepped up to take the leadership of the legal department at Microsoft, not surprisingly, that the issues are reflective of the fact that there has been a transition to cloud services. So, internet policy issues like net neutrality, as well as issues related to privacy and the management of personal data of users of our services, and more recently even the threat to the continuity of the transatlantic flows of data in the context of the EU/US Safe Harbor agreement and the successor to that agreement, which is called the Privacy Shield. Those are really the issues that we face day to day. It’s not that the other issues have gone away, but when it comes to the emphasis of our focus and the novelty and complexity of the issues, I would say privacy and security as well as law enforcement access to personal data are certainly the topics of the day.
What are you particularly proud of?
The thing that I am most proud of for Microsoft is the fact that throughout all the pendulum swings of the debate around policy related to privacy and security and the balancing of the valuable societal goal of protecting the fundamental right to privacy. . .that throughout that debate Microsoft has really done an excellent job of remaining balanced and not being swayed by the particular “events of the moment,” recognizing that there are certain enduring values that are enshrined in the United States Constitution, but are also part of our company values, and that we really can’t choose one priority over the others. In the long run, people will want to balance those things in a sophisticated way. I am proud of the fact that Microsoft continues to be a thoughtful participant in that discussion and doesn’t just fall into the easy trap of advocating whatever is popular or considered conventional wisdom at a particular time. That is a hard thing to articulate, by definition, but it is perhaps in the long run one of the most important things that leaders in the industry can do.
What attracted you to Spotify?
Well, because of my background during my years at Microsoft as well before, Spotify really presented a very unique opportunity to use my experience on intellectual property issues in the context of their own business model, which relies to a significant extent on licensing rights from music labels and artists around the world. . . as well as my regulatory experience, because they’re not only a music company at heart, they’re also a data company and an internet services company. They are a technology company, and they have hundreds and hundreds of software developers. So whether it be helping tackle legal issues related to their product development road map, or whether it be in the context of continuing to maintain good relations with the IP holders, the music labels, and others, or whether it be the engagement of the regulatory front to ensure that the internet is not over-regulated to the point where new business models can no longer emerge, those things play to my strengths.
At the same time, it will give me opportunities to do things I haven’t done before. Being the corporate secretary for the board of directors will be a new experience for me, as well as helping the company lay the groundwork for an eventual IPO. And more generally, it gives me an opportunity to be in a company that is really working to redefine the music business and the business model associated with how people consume music around the world. I found that incredibly exciting, and I felt that that was certainly the way in which I wanted to spend the next stage of my professional career.
What are you finding most interesting in the industry right now? What are you finding most troubling?
I would say we are all struggling to figure out what the right balance is between privacy and security and national security. So the issues relating to surveillance in the post-Snowden world, as well as issues that are incidental to that, such as the discussion around encryption, which more recently has come to the forefront in the context of the Apple litigation against the FBI. We are in the early stage of the discussion on these issues that are really going to determine whether US technology companies continue to be trusted by users in other parts of the world. One has to remember that only 4.5% of the world’s population lives in the United States. America continues to have its technological leadership around the world in large part because people recognize that the technology products and services that come out of the United States are of the highest quality, the most valuable to people’s daily lives.
But that preeminence in the technology world for the United States and US technology companies relies on the ability for users all over the world to trust that their data, when entrusted to us, will be treated in a responsible way, and that it will not be accessed outside the confines of the law and the due process requirements under the law. That carefully crafted balance between privacy and law enforcement considerations that was developed over centuries of case law evolution doesn’t necessary provide the full answer for how those issues are going to be dealt with in the context of the internet. So we have to answer the question: How must that balance be struck again in the context of the internet, and how do we ensure that the same fundamental guarantees afforded by the Constitution are equally viable and applicable in the internet world?
What type of culture do you hope to foster at Spotify?
I would like to preserve the entrepreneurial culture of Spotify. It is a company that has been incredibly successful since its founding 10 years ago and has become a leader in music streaming services. If anything, I am asking myself, how am I going to adapt my culture to that one? My philosophy as an in-house counsel has always been to both be a partner of the business in allowing it to achieve business objectives, and at the same time perform my role as legal counsel with objectivity so that the company in the process of the competitive dynamics in the marketplace doesn’t lose its way and is always true to its fundamental principles. So there are some things that will not change; the fundamental role of the general counsel will be the same regardless of the industry and whether you are a startup or an established company. And yet there is something quite energizing about the startup environment that I am really looking forward to experiencing to the fullest.
I read that you will be busy ensuring that Spotify has a voice on public policy matters, including the ongoing net neutrality debate. Could you give us a “crib sheet” version of the debate and how it affects Spotify?
At the end of the day, the success of any company on the internet that is providing services to users through apps or in any other way is the ability to reach those consumers. And anything that stands in the way of that access, whether it’s because it imposes “toll gates” that increase the cost for some players and not others, or because it detracts on the performance of certain services or the speed at which certain services can be performed, those are all strains and influences that upset what has been a highly dynamic and competitive space. The success of the internet has been its openness, its transparency, and the fact that it provides a level playing field to all those who participate in that sphere. We just want to make sure that that freedom and that level playing field are preserved in the future so that we can continue to access our user base and provide them the value that they expect to receive from us.
As you think back to your time at Morgan Lewis, do any particular fond memories come to mind?
I was in both the business practice group as well as the international practice group. I have incredibly fond memories of my time at Morgan Lewis. Some of the friendships I made there have endured until this day. But also the support from the firm and the partners in the firm, and the generosity and comradery of the people in the firm, really stand out as things that were critical in my development as a young lawyer and that eventually would lead to my opportunity to join Microsoft and then further to the point in my career that I find myself today.
Were there any mentors or other lawyers at Morgan Lewis who were influential in your career?
Well, I would say, I would certainly point out Mark Zelek, who is a partner in the Miami office; Terry Connor, the former managing partner of the Miami office, was also a very strong mentor for me. Ethan Johnson in the Miami office. And I think, in a very important and special way, there is an international consultant in the Miami office, Salvador Juncadella, who has continued to be my mentor and in many ways a close friend and guide to different points in my career, which I will always be grateful for.
Are there any personal updates or milestones you’d like to share with Morgan Lewis alumni?
Well, at this point, my biggest milestone is right in front of me: relocating myself and my family to Manhattan. I have three kids, two of whom are in college already, so they are out of the house. But I still have a 12-year-old boy who is coming with me and who is an avid soccer player. So finding a team as well as a school and a place to live in New York is. . .the most pressing set of challenges that I have in front of me at this particular point.
What do you do for fun?
I am a boater. I have a power boat, which I’ll have to figure out if I’ll be able to keep when I go to New York. I love going to the San Juan Islands, on the border with Canada near Victoria and Vancouver. We do that every summer, and it’s really paradise for a boater. And in part because of my son, we’ve become very keen soccer fans and follow the MLS teams. We support the Seattle Sounders, and we follow the Spanish League, as well as the English Premiere League. And so, you will find us every weekend watching at least one game, as well as going to my son’s own games and cheering for him.