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Newsmaker interviews

Microsoft President Brad Smith discusses the intersection of technology, society & government

At a recent Reuters Newsmaker event, Microsoft President and CLO Brad Smith talked about the company's past and how it's evaluating the impact of new cutting edge technologies, like facial recognition.

NEW YORK — In the early days of Microsoft, it was “sort of unimaginable” that “legal and regulatory and societal issues would be so front-and-center for a company like Microsoft,” said Stephen Adler, Editor-in-Chief and President of Reuters.

But after the company’s antitrust battles in the 1990s, Microsoft saw the value that someone like Brad Smith, formerly a partner at law firm Covington and Burling, could bring. Smith is now Microsoft’s President and its Chief Legal Officer; and he has written a book, Tools and Weapons: The Promise and the Peril of the Digital Age.

Smith joined Adler at a Reuters Newsmaker event earlier this month for a wide-ranging discussion about privacy, cybersecurity, and the intersection of technology, society, and government.

The interview began, not surprisingly, with a brief discussion of Microsoft’s recent performance. Smith said that what may have appeared to be lost opportunities were, in fact, engineering fumbles. The company “had the opportunity to be the fast follower to the iPhone” in 2007, said Smith. “We just lost the core of our engineering execution, in my view.” The company was determined that history not repeat itself, and later it moved aggressively into cloud computing.

Smith credited Microsoft’s strong performance over the past five years largely to the selection of Satya Nadella as CEO. “If you can find an insider who can make the painful decision to take a company where it needs to go, you are likely to have someone who just knows how to move everyone with him or her,” he said, referring to Nadella. “That person just knows the place, just knows the culture, and that is such an effective recipe for leadership.”

A role in national security

Reuters’ Adler then turned to national security and surveillance issues, which became the main focus of the conversation. Smith said that Microsoft gets about 50,000 search warrants and government warrants a year, from 70 countries. Thankfully, he said, only about 3% request content. But the sheer volume of requests still requires “dozens” of people at Microsoft and “an army” of outside attorneys and other professionals, Smith explained.

“If you can find an insider who can make the painful decision to take a company where it needs to go, you are likely to have someone who just knows how to move everyone with him or her.”

The key to effectively managing the deluge is to make sure that anything that raises “real problems from a human rights perspective” gets prioritized as quickly as possible, said Smith. Microsoft has four principles that guide its responses to such requests: privacy, security, legal compliance, and security — and Smith still stays involved in situations. “I do ask that I have personal visibility to where there are hard calls that need to be made,” he said. “I don’t want to find out about them later.”

Smith said that the U.S. government has not asked Microsoft to change its software to allow the government to eavesdrop. But a related tussle has emerged over data centers, which Smith called “in some ways the most important infrastructure element for the 21th century.”

“The most obvious thing” a government can do is “to say they want a data center in their country, and they want their own eavesdropping equipment inside the data center,” he added.

Smith says Microsoft will not allow that. When pushed by a government in whose country Microsoft already has a data center, Smith says, Microsoft would close the data center rather than allow eavesdropping. So far, he says, when a government realizes Microsoft will not capitulate, they have always backed off.

New frontier of facial recognition

Facial recognition technology represents another contentious area. Microsoft does not support a temporary ban on the technology while standards are agreed upon. But the company is in favor of some restrictions: Smith doesn’t want law enforcement to be able to use the technology for ongoing surveillance on someone without a search warrant or similar court order. And Microsoft will not sell facial recognition technology for the purpose of mass surveillance anywhere in the world.

There are grey areas, though. Smith says a law enforcement agency in California wanted to use Microsoft’s facial recognition technology to take a picture of anyone who was pulled over for any reason, and then to try to match that photo with those in a database. Smith says that Microsoft told the law enforcement agency that, given the current state of the technology, they were going to have false positives “in a disproportionate way” for women and people of color.

“I do ask that I have personal visibility to where there are hard calls that need to be made. I don’t want to find out about them later.”

“We thought it was an especially important issue, frankly for people of color,” he said. “You’re going to end up putting African-Americans, and others, in the back seats of police cars and taking them downtown and finding that was not somebody who ever should have been put in that situation.”

Smith said the sales team had qualms about rejecting the deal, figuring the law enforcement agency would simply buy the software from someone else. But Smith says that’s not what happened. “The answer we got from the law enforcement agency was actually, we are so glad you told us this, because you have just stopped us from making a mistake.”

Adler and Smith also took time to address the digital divide. Quoting data from the Pew Research Center that says 35% of Americans don’t use broadband internet at home, and from the Federal Communications Commission (FCC), which pegs the number at 46% of U.S. households, Adler asked about the significance of the problem.

Smith says the problem is actually much worse. He went to visit Republic, Washington, a town that, according to the FCC, has ubiquitous broadband. “The people who live in these communities say, no we don’t,” Smith said. “Absolutely we don’t.” The largest employer in that county, a cedar mill with 170 workers, was operating off a single copper line “that basically had bandwidth that is probably 20% of what” audience members were likely have in their homes.

“If you want to understand why this county disproportionately voted for Donald Trump, all you have to do is spend one day there,” he said. “They can’t get federal funding to bring broadband there because the FCC says they already have it.”

“They feel left behind because they are left behind, and the government in Washington doesn’t even know it.”

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