Orbitz 2008 Annual Report Download - page 30

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Our business is subject to laws and regulations relating to our revenue generating and marketing activities, including those prohibiting unfair and deceptive
advertising or practices. Our travel services are subject to regulation and laws governing the offer of travel products and services, including laws requiring us to
register as a "seller of travel" in various jurisdictions and to comply with certain disclosure requirements. As an OTC that offers customers the ability to book air
transportation products in the U.S., we are also subject to regulation by the Department of Transportation, which has authority to enforce economic regulations
and may assess civil penalties or challenge our operating authority.
Our failure to comply with these laws and regulations may subject us to fines, penalties and potential criminal violations. Any changes to these laws or
regulations or any new laws or regulations may make it more difficult for us to operate our businesses and may have a material adverse effect on our operations.
Our processing, storage, use and disclosure of personal data could give rise to liabilities as a result of governmental regulation, conflicting legal
requirements, differing views of personal privacy rights or security breaches.
In the processing of our traveler transactions, we receive and store a large volume of personally identifiable information. This information is increasingly
subject to legislation and regulations in numerous jurisdictions around the world. This government action is typically intended to protect the privacy and security
of personal information, including credit card information, that is collected, processed and transmitted in or from the governing jurisdiction.
We could be adversely affected if domestic or international legislation or regulations are expanded to require changes in our business practices, or if
governing jurisdictions interpret or implement their legislation or regulations in ways that negatively affect our business. For example, in the aftermath of the
terrorist attacks of September 11, 2001 in the U.S., government agencies have been contemplating or developing initiatives to enhance national and aviation
security, including the Transportation Security Administration's Computer Assisted Passenger Prescreening System, known as CAPPS II. These initiatives may
result in conflicting legal requirements with respect to data handling.
Travel businesses have also been subjected to investigations, lawsuits and adverse publicity due to allegedly improper disclosure of passenger information.
As privacy and data protection have become more sensitive issues, we may also become exposed to potential liabilities as a result of differing views on the
privacy of travel data. These and other privacy concerns, including security breaches, could adversely impact our business, financial condition and results of
operations.
Our international operations are subject to additional risks not encountered when doing business in the U.S., and our exposure to these risks will increase as
we expand our international operations.
Our international operations involve risks that may not exist when doing business in the U.S. With employees in approximately 20 countries outside the
U.S., we generated 21% of our net revenue for the year ended December 31, 2007 from our international operations. In order to achieve widespread acceptance
in each country we enter, we must tailor our services to the unique customs and cultures of that country. Learning the customs and cultures of various countries,
particularly with respect to travel patterns and practices, is a difficult task and our failure to do so could slow our growth in international markets.
In addition, we are subject to certain risks as a result of having international operations and from having operations in multiple countries generally,
including:
•
delays in the development of the Internet as a broadcast, advertising and commerce medium in overseas markets;
23
Source: Orbitz Worldwide, In, 10-K/A, August 28, 2008