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Microsoft Compliance Chief Jumps to TikTok as Top U.S. Lawyer

July 6, 2021, 10:12 PM

TikTok Inc., a social networking service owned by China’s ByteDance Ltd. that’s faced scrutiny from U.S. regulators and policymakers within the past year, has brought on a new legal chief for its Americas arm.

Matthew Penarczyk, who spent nearly 19 years in-house at Microsoft Corp., recently left the company to become Americas head of legal for TikTok. Penarczyk’s new position makes him TikTok’s top lawyer in the U.S. and broader Americas region, which includes South America, said company spokesman Josh Gartner.

“I have had the privilege of supporting the brightest innovators in the world, learning from the best lawyers in tech, and leading teams that have truly enriched by life,” Penarczyk wrote last month in his profile on Microsoft-owned LinkedIn.

TikTok has been busy within the past year recruiting lawyers and public policy professionals as it battled the Trump administration over its data gathering policies. Penarczyk, whose first day at TikTok was June 7, has reunited with longtime former Microsoft legal colleague Erich Andersen, hired last year as ByteDance’s global general counsel and head of corporate affairs.

Federal judges blocked the U.S. government’s bid to ban TikTok, and in early June the Biden administration announced it would revoke Trump-era orders targeting the company in favor of a broader review of software applications owned by foreign adversaries that could potentially pose national security risks.

Microsoft was one of several bidders last year seeking to acquire TikTok’s U.S. operations, teaming up with retail giant Walmart Inc. on an offer that was ultimately rejected by ByteDance in September.

K&L Gates, a law firm with longstanding ties to Microsoft, was paid $40,000 during the first quarter of this year by ByteDance for it to lobby the U.S. government on a range of issues, according to public records. ByteDance has paid $240,000 to K&L Gates for federal advocacy work since retaining the firm in November 2019.

As for Penarczyk, he was most recently deputy general counsel for compliance and ethics at Microsoft, a role that made him head of the Redmond, Wash.-based company’s compliance and ethics organization. The software giant hired the former Holland & Knight lawyer in 2002, the same year Microsoft reached a landmark settlement with U.S. antitrust regulators that reshaped the technology industry.

“There was something magical about arriving at Microsoft in 2002,” Penarczyk recently wrote on LinkedIn. “My wife, baby daughter, and I excitedly took the obligatory family photo in front of the Microsoft logo at the entrance to main campus and couldn’t believe our fortune to work at such an iconic company.”

Over the next two decades Penarczyk held a variety of in-house roles at Microsoft. The company earlier this year was named one of the world’s most ethical businesses, an honor bestowed on Microsoft for the past 11 years by the Ethispere Institute, a nonprofit that evaluates corporate ethical standards.

“It’s not just words from the top. It’s actions and it’s accountability,” Penarczyk said in March when asked about that streak of success in an interview with legal trade publication Corporate Counsel. Penarczyk also spoke about his role helping Microsoft manage ethics and compliance challenges related to the coronavirus pandemic, building a compliance culture, and embracing diversity and inclusion.

During his time at Microsoft, Penarczyk worked with both Andersen—the company’s former chief intellectual property counsel—and former general counsel Horacio Gutierrez, who left in 2016 and joined Spotify Technology SA, where he’s now the podcast and streaming audio service’s chief legal and global affairs officer.

Microsoft watched Gutierrez’s successor as general counsel, Deborah “Dev” Stahlkopf, recently resign as she prepares to become the new legal chief at Cisco Systems Inc. Stahlkopf’s departure was disclosed by Microsoft president and chief legal officer Bradford Smith in an internal memo obtained by Bloomberg Law last week announcing a wider series of in-house legal changes at the company.

Rebecca “Becky” Lenaburg, an associate general counsel who was part of Penarczyk’s team at Microsoft, and several other in-house lawyers will assume leadership of his ethics and compliance portfolio, said two company sources familiar with the matter.

To contact the reporter on this story: Brian Baxter in New York at bbaxter@bloomberglaw.com

To contact the editor responsible for this story: Chris Opfer at copfer@bloomberglaw.com

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