Google 2009 Annual Report Download - page 35

Companies in the internet, technology, and media industries own large numbers of patents, copyrights, and
trademarks and frequently enter into litigation based on allegations of infringement or other violations of
intellectual property rights. As we face increasing competition, the possibility of intellectual property claims against
us grows. Our technologies may not be able to withstand any third-party claims or rights against their use.
Government Regulation
We are subject to a number of foreign and domestic laws and regulations that affect companies conducting
business on the internet. In addition, laws and regulations relating to user privacy, freedom of expression, content,
advertising, information security, and intellectual property rights are being debated and considered for adoption by
many countries throughout the world. We face risks from some of the proposed legislation that could be passed in
the future.
In the U.S., laws relating to the liability of providers of online services for activities of their users and other third
parties are currently being tested by a number of claims, which include actions for libel, slander, invasion of privacy
and other tort claims, unlawful activity, copyright and trademark infringement, and other theories based on the
nature and content of the materials searched, the ads posted, or the content generated by users. Certain foreign
jurisdictions are also testing the liability of providers of online services for activities of their users and other third
parties. Any court ruling that imposes liability on providers of online services for activities of their users and other
third parties could harm our business.
A range of other laws and new interpretations of existing laws could have an impact on our business. For
example, the Digital Millennium Copyright Act has provisions that limit, but do not necessarily eliminate, our liability
for listing, linking, or hosting third-party content that includes materials that infringe copyrights. Various U.S. and
international laws restrict the distribution of materials considered harmful to children and impose additional
restrictions on the ability of online services to collect information from minors. In the area of data protection, many
states have passed laws requiring notification to users when there is a security breach for personal data, such as
California’s Information Practices Act. The costs of compliance with these laws may increase in the future as a
result of changes in interpretation. Furthermore, any failure on our part to comply with these laws may subject us
to significant liabilities.
Similarly, the application of existing laws prohibiting, regulating, or requiring licenses for certain businesses of
our advertisers, including, for example, online gambling, distribution of pharmaceuticals, adult content, financial
services, alcohol, or firearms, can be unclear. Application of these laws in an unanticipated manner could expose us
to substantial liability and restrict our ability to deliver services to our users.
We also face risks due to government failure to preserve the internet’s basic neutrality as to the services and
sites that users can access through their broadband service providers. Such a failure to enforce network neutrality
could limit the internet’s pace of innovation and the ability of large competitors, small businesses, and
entrepreneurs to develop and deliver new products, features, and services, which could harm our business.
We are also subject to federal, state, and foreign laws regarding privacy and protection of user data, including
personal health records. We post on our web site our privacy policies and practices concerning the use and
disclosure of user data. Any failure by us to comply with our posted privacy policies or privacy related laws and
regulations could result in proceedings against us by governmental authorities or others, which could potentially
harm our business. In addition, the interpretation of data protection laws, and their application to the internet, in
Europe and other foreign jurisdictions is unclear and in a state of flux. There is a risk that these laws may be
interpreted and applied in conflicting ways from country to country and in a manner that is not consistent with our
current data protection practices. Complying with these varying international requirements could cause us to incur
additional costs and change our business practices. Further, any failure by us to protect our users’ privacy and data
could result in a loss of user confidence in our services and ultimately in a loss of users, which could adversely
affect our business.
17