Go Daddy 2015 Annual Report Download - page 40

Table of Contents
to be unable to process payments using credit cards. If we are unable to accept credit card payments, our business, financial condition and operating results may be
adversely affected.
In addition, we could be liable if there is a breach of the payment information we store. Online commerce and communications depend on the secure
transmission of confidential information over public networks. We rely on encryption and authentication technology to authenticate and secure the transmission of
confidential information, including customer credit card numbers. However, we cannot ensure this technology will prevent breaches of the systems we use to
protect customer payment data. Although we maintain network security insurance, we cannot be certain our coverage will be adequate for liabilities actually
incurred or insurance will continue to be available to us on reasonable terms, or at all. In addition, some of our partners also collect or possess information about
our customers, and we may be subject to litigation or our reputation may be harmed if our partners fail to protect our customers’ information or if they use it in a
manner inconsistent with our practices. Data breaches can also occur as a result of non-technical issues. Under our contracts with our processors, if there is
unauthorized access to, or disclosure of, credit card information we store, we could be liable to the credit card issuing banks for their cost of issuing new cards and
related expenses.
Activities of customers or the content of their websites could damage our reputation and brand or harm our business and financial results.
As a provider of domain name registration and hosting and presence products, we may be subject to potential liability for the activities of our customers on or
in connection with their domain names or websites or for the data they store on our servers. Although our terms of service prohibit illegal use of our products by
our customers and permit us to take down or suspend websites or take other appropriate actions for illegal use, customers may nonetheless engage in prohibited
activities or upload or store content with us in violation of applicable law or the customer’s own policies, which could subject us to liability. Furthermore, our
reputation and brand may be negatively impacted by the actions of customers that are deemed to be hostile, offensive or inappropriate. We do not proactively
monitor or review the appropriateness of the domain names our customers register or the content of their websites, and we do not have control over customer
activities. The safeguards we have in place may not be sufficient to avoid harm to our reputation and brand, especially if such hostile, offensive or inappropriate
use is high profile.
Several U.S. federal statutes may apply to us with respect to various activities of our customers, including: the Digital Millennium Copyright Act of 1998 (the
DMCA), which provides recourse for owners of copyrighted material who believe their rights under U.S. copyright law have been infringed on the Internet; the
Communications Decency Act of 1996 (the CDA), which regulates content on the Internet unrelated to intellectual property; and the Anticybersquatting Consumer
Protection Act (the ACPA), which provides recourse for trademark owners against cybersquatters. The DMCA and the CDA generally protect online service
providers like us that do not own or control website content posted by customers from liability for certain activities of customers, such as the posting of defamatory
or obscene content, unless the online service provider is participating in the unlawful conduct. For example, the safe harbor provisions of the DMCA shield
Internet service providers and other intermediaries from direct or indirect liability for copyright infringement. However, under the DMCA, we must follow the
procedures for handling copyright infringement claims set forth in the DMCA including expeditiously removing or disabling access to the allegedly infringing
material upon the receipt of a proper notice from, or on behalf of, a copyright owner alleging infringement of copyrighted material located on websites we host.
Under the CDA, we are generally not responsible for the customer-created content hosted on our servers and thus are generally immunized from liability for torts
committed by others. Consequently, we do not monitor hosted websites or prescreen the content placed by our customers on their sites. Under the safe harbor
provisions of the ACPA, domain name registrars are shielded from liability in many circumstances, including cybersquatting, although the safe harbor provisions
may not apply if our activities are deemed outside the scope of registrar functions.
Although these statutes and case law in the United States have generally shielded us from liability for customer activities to date, court rulings in pending or
future litigation may narrow the scope of protection afforded us under these laws. Neither the DMCA nor the CDA generally apply to claims of trademark
violations, and thus they may be inapplicable to many of the claims asserted against our company. Furthermore, notwithstanding the exculpatory language of these
bodies of law, the activities of our customers may result in threatened or actual litigation against us. If such claims are successful, our business and operating
results could be adversely affected, and even if the claims do not result in litigation or are resolved in our favor, these claims, and the time and resources necessary
to resolve them, could divert the resources of our management and adversely affect our business and operating results.
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