Go Daddy 2015 Annual Report Download - page 43

Table of Contents
subscriptions to our products may be influenced by macroeconomic factors affecting small businesses and ventures and consumer spending. Although we
continued to grow through the most recent recession, we may be unable to do so in future economic slowdowns.
To the extent conditions in the national and global economy deteriorate, our business could be harmed as customers may reduce or postpone spending or
choose not to purchase or renew subscriptions to our products. Weakening economic conditions may also adversely affect third parties with which we have entered
into relationships and upon which we depend in order to grow our business. Uncertain and adverse economic conditions may also lead to a decline in the ability of
our customers to use or access credit, including through credit cards, as well as increased refunds and chargebacks, any of which could adversely affect our
business.
We are subject to export controls and economic sanctions laws that could impair our ability to compete in international markets and subject us to liability if we
are not in full compliance with applicable laws.
Our business activities are subject to various restrictions under U.S. export controls and trade and economic sanctions laws, including the U.S. Commerce
Department’s Export Administration Regulations and economic and trade sanctions regulations maintained by the U.S. Treasury Department’s Office of Foreign
Assets Control (OFAC). If we fail to comply with these laws and regulations, we could be subject to civil or criminal penalties and reputational harm. U.S. export
control laws and economic sanctions laws also prohibit certain transactions with U.S. embargoed or sanctioned countries, governments, persons and entities.
As part of our due diligence in connection with the acquisition of Media Temple in 2013, we learned Media Temple had apparently provided services during
the previous five years to a limited number of persons located in countries that are the subject of U.S. embargoes. Media Temple filed with OFAC an initial
voluntary disclosure in September 2013 and a final voluntary disclosure in January 2014. Additionally, as part of our due diligence in connection with the August
2014 acquisition of Mad Mimi, LLC (Mad Mimi), we and our counsel reviewed and assessed various business data provided by Mad Mimi and learned Mad Mimi
had provided services during the previous five years to a limited number of persons located in countries subject to U.S. embargoes. As a result of that review and in
connection with the closing of our acquisition, Mad Mimi filed an initial voluntary disclosure with OFAC in August 2014, terminated the unauthorized accounts,
and filed a final report with OFAC in February 2015. OFAC closed out both voluntary disclosures without penalties on September 10, 2015 and May 5, 2015,
respectively. We have undertaken and are continuing to implement a number of screening and other remedial measures designed to prevent users in embargoed
countries and prohibited persons from purchasing or accessing our products or services. Even though we take precautions to prevent transactions with U.S.
sanctions targets, there is risk that in the future we could provide our products to such targets despite such precautions. Changes in the list of embargoed countries
and regions or prohibited persons may require us to modify these procedures in order to comply with governmental regulations. This could result in negative
consequences to us, including government investigations, penalties and reputational harm.
Changes in our products or changes in export and import regulations may create delays in the introduction and sale of our products in international markets
or, in some cases, prevent the sale of our products to certain countries, governments or persons altogether. Any change in export or import regulations, shift in the
enforcement or scope of existing regulations, or change in the countries, governments, persons or technologies targeted by such regulations, could result in
decreased use of our products or decreased ability to sell our products to existing or potential customers. Any decreased use of our products or limitation on our
ability to sell our products internationally could adversely affect our growth prospects.
Due to the global nature of our business, we could be adversely affected by violations of anti-bribery and anti-corruption laws.
The global nature of our business creates various domestic and local regulatory challenges. The U.S. Foreign Corrupt Practices Act of 1977, as amended (the
FCPA), the U.K. Bribery Act 2010 (the U.K. Bribery Act), U.S. Travel Act and similar anti-bribery and anti-corruption laws in other jurisdictions generally
prohibit companies and their intermediaries from making improper payments to foreign government officials and other persons for the corrupt purpose of obtaining
or retaining business, directing business to any person or securing any advantage. In addition, companies are required to maintain records accurately and fairly
representing their transactions and having an adequate system of internal accounting controls. We face significant risks if we fail to comply with the FCPA and
other anti-corruption and anti-bribery laws prohibiting companies and their employees and third-party intermediaries from authorizing, offering or providing,
directly or indirectly, improper payments or benefits to foreign government officials, political parties and private-sector recipients for an illegal purpose.
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