Amazon.com 2002 Annual Report Download - page 25

We May Not Be Able to Adapt Quickly Enough to Changing Customer Requirements and Industry
Standards
Technology in the e-commerce industry changes rapidly. We may not be able to adapt quickly enough
to changing customer requirements and preferences and industry standards. Competitors often introduce
new products and services with new technologies. These changes and the emergence of new industry
standards and practices could render our existing Web sites and proprietary technology obsolete.
The Internet as a Medium for Commerce Is Uncertain
Consumer use of the Internet as a medium for commerce is a recent phenomenon and is subject to a
high level of uncertainty. While the number of Internet users has been rising, the Internet infrastructure
may not expand fast enough to meet the increased levels of demand. If use of the Internet as a medium
for commerce does not continue to grow or grows at a slower rate than we anticipate, our sales would be
lower than expected and our business would be harmed.
We Could Be Liable for Unlawful or Fraudulent Activities by Users of Our Merchants@ program,
Merchant.com program, Amazon Marketplace, Auctions and zShops Services
We may be unable to prevent users of our Merchants@ program, Merchant.com program, Amazon
Marketplace, Auctions and zShops services from selling unlawful goods, or from selling goods in an
unlawful manner. We may face civil or criminal liability for unlawful and fraudulent activities by our users
under U.S. laws and/or the laws and regulations of other countries. In addition, if we are unsuccessful in
preventing our users from providing content that is either illegal or which violates the proprietary rights of
others, it may result in liability to us. Any costs we incur as a result of liability relating to the sale of
unlawful goods, the unlawful sale of goods, the fraudulent receipt of goods or the fraudulent collection of
payments could harm our business. In running our Merchants@ program, Merchant.com program,
Amazon Marketplace, Auctions and zShops services, we rely on sellers to make accurate representations
and provide reliable delivery, and on buyers to pay the agreed purchase price. We do not take
responsibility for delivery of payment or goods and, while we can suspend or terminate the accounts of
users who fail to fulÑll their delivery obligations, we cannot require users to make payments or deliver
goods. We do not compensate users who believe they have been defrauded by other users except through
our guarantee program. Under our guarantee program, fraudulent activities by our users, such as the
fraudulent receipt of goods and the fraudulent collection of payments, may create liability for us.
16