Amazon.com 2013 Annual Report Download - page 23

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• changes in the valuation methodology of, or performance by, other e-commerce or technology companies; and
• transactions in our common stock by major investors and certain analyst reports, news, and speculation.
Volatility in our stock price could adversely affect our business and financing opportunities and force us to increase our
cash compensation to employees or grant larger stock awards than we have historically, which could hurt our operating results
or reduce the percentage ownership of our existing stockholders, or both.
Government Regulation Is Evolving and Unfavorable Changes Could Harm Our Business
We are subject to general business regulations and laws, as well as regulations and laws specifically governing the
Internet, e-commerce, electronic devices, and other services. Existing and future laws and regulations may impede our growth.
These regulations and laws may cover taxation, privacy, data protection, pricing, content, copyrights, distribution, mobile
communications, electronic device certification, electronic waste, energy consumption, environmental regulation, electronic
contracts and other communications, competition, consumer protection, web services, the provision of online payment services,
unencumbered Internet access to our services, the design and operation of websites, and the characteristics and quality of
products and services. It is not clear how existing laws governing issues such as property ownership, libel, and personal privacy
apply to the Internet, e-commerce, digital content, and web services. Jurisdictions may regulate consumer-to-consumer online
businesses, including certain aspects of our seller programs. Unfavorable regulations and laws could diminish the demand for
our products and services and increase our cost of doing business.
We Do Not Collect Sales or Consumption Taxes in Some Jurisdictions
U.S. Supreme Court decisions restrict the imposition of obligations to collect state and local sales taxes with respect to
remote sales. However, an increasing number of states have considered or adopted laws or administrative practices that attempt
to impose obligations on out-of-state retailers to collect taxes on their behalf. We support a Federal law that would allow states
to require sales tax collection under a nationwide system. More than half of our revenue is already earned in jurisdictions where
we collect sales tax or its equivalent. A successful assertion by one or more states or foreign countries requiring us to collect
taxes where we do not do so could result in substantial tax liabilities, including for past sales, as well as penalties and interest.
We Could be Subject to Additional Income Tax Liabilities
We are subject to income taxes in the United States and numerous foreign jurisdictions. Significant judgment is required
in evaluating and estimating our provision and accruals for these taxes. During the ordinary course of business, there are many
transactions for which the ultimate tax determination is uncertain. Our effective tax rates could be adversely affected by
earnings being lower than anticipated in countries where we have lower statutory rates and higher than anticipated in countries
where we have higher statutory rates, by losses incurred in jurisdictions for which we are not able to realize the related tax
benefit, by changes in foreign currency exchange rates, by entry into new businesses and geographies and changes to our
existing businesses, by acquisitions (including integrations) and investments, by changes in the valuation of our deferred tax
assets and liabilities, or by changes in the relevant tax, accounting and other laws, regulations, administrative practices,
principles, and interpretations, including fundamental changes to the tax laws applicable to corporate multinationals. The
United States, many countries in the European Union, and a number of other countries are actively considering changes in this
regard. In addition, we are subject to audit in various jurisdictions, and such jurisdictions may assess additional income tax
liabilities against us. Although we believe our tax estimates are reasonable, the final outcome of tax audits and any related
litigation could be materially different from our historical income tax provisions and accruals. Developments in an audit,
litigation, or the relevant laws, regulations, administrative practices, principles, and interpretations could have a material effect
on our operating results or cash flows in the period or periods for which that development occurs, as well as for prior and
subsequent periods.
Our Supplier Relationships Subject Us to a Number of Risks
We have significant suppliers, including licensors, and in some cases, limited or single-sources of supply, that are
important to our sourcing, services, manufacturing, and any related ongoing servicing of merchandise and content. We do not
have long-term arrangements with most of our suppliers to guarantee availability of merchandise, content, components, or
services, particular payment terms, or the extension of credit limits. If our current suppliers were to stop selling or licensing
merchandise, content, components, or services to us on acceptable terms, or delay delivery, including as a result of one or more
supplier bankruptcies due to poor economic conditions, as a result of natural disasters, or for other reasons, we may be unable
to procure alternatives from other suppliers in a timely and efficient manner and on acceptable terms, or at all.