Vistaprint 2013 Annual Report Download - page 26

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impede the growth of e-commerce and our ability to compete with traditional “bricks and mortar” retailers. It is not
always clear how existing laws governing these and other issues apply to the Internet and e-commerce, as the vast
majority of applicable laws were adopted before the advent of the Internet and do not contemplate or address the
unique issues raised by the Internet or e-commerce. Those laws that do reference the Internet, such as the
Bermuda Electronic Transactions Act 1999, the U.S. Digital Millennium Copyright Act, and the U.S. CAN SPAM Act
of 2003, are only beginning to be interpreted by the courts, and their applicability and reach are therefore uncertain.
Those current and future laws and regulations or unfavorable resolution of these issues may substantially harm our
business and results of operations.
We face judicial and regulatory challenges to our practice of offering free products and services, which, if
successful, could hinder our ability to attract customers and generate revenue.
We regularly offer free products and services as an inducement for customers to try our products and
services. Although we believe that we conspicuously and clearly communicate all details and conditions of these
offers, such as the shipping and processing charges associated with these offers, from time to time we face claims,
complaints, and inquiries from our customers, competitors, governmental regulators, standards bodies, and others
that our free offers are misleading or do not comply with applicable legislation or regulation, and we may receive
similar complaints, claims and inquiries in the future. If we are compelled or determine to curtail or eliminate our use
of free offers as the result of any such actions, our business prospects and results of operations could be materially
harmed.
If we were required to review the content that our customers incorporate into our products and interdict the
shipment of products that violate copyright protections or other laws, our costs would significantly
increase, which would harm our results of operations.
Because of our focus on automation and high volumes, the vast majority of our sales do not involve any
human-based review of content. Although our websites' terms of use specifically require customers to represent
that they have the right and authority to reproduce a given content and that the content is in full compliance with all
relevant laws and regulations, we do not have the ability to determine the accuracy of these representations on a
case-by-case basis. There is a risk that a customer may supply an image or other content for a product order that
we produce that is the property of another party used without permission, that infringes the copyright or trademark
of another party, or that would be considered to be defamatory, hateful, obscene, or otherwise objectionable or
illegal under the laws of the jurisdiction(s) where that customer lives or where we operate. If we become legally
obligated in the future to perform manual screening and review for all orders destined for a jurisdiction, we will
encounter increased production costs or may cease accepting orders for shipment to that jurisdiction, which could
substantially harm our business and results of operations. In addition, if we were held liable for actions of our
customers, we could be required to pay substantial penalties, fines, or monetary damages.
We are subject to customer payment-related risks.
We accept payments for our products and services on our websites by a variety of methods, including
credit or debit card, PayPal, check, wire transfer or other methods. In some geographic regions, we rely on one or
two third party companies to provide payment processing services. If any of the payment processing or other
companies with which we have contractual arrangements became unwilling or unable to provide these services to
us or we are unable to comply with our contractual requirements under such arrangements, then we would need to
find and engage replacement providers, which we may not be able to do on terms that are acceptable to us or at all,
or to process the payments ourselves. Any of these scenarios could be disruptive to our business as they could be
costly and time consuming and may unfavorably impact our customers.
As we offer new payment options to our customers, we may be subject to additional regulations,
compliance requirements and fraud risk. For some payment methods, including credit and debit cards, we pay
interchange and other fees, which may increase over time and raise our operating costs and lower our profit
margins or require that we charge our customers more for our products. We are also subject to payment card
association and similar operating rules and requirements, which could change or be reinterpreted to make it difficult
or impossible for us to comply. If we fail to comply with these rules and requirements, we may be subject to fines
and higher transaction fees and lose our ability to accept credit and debit card payments from our customers or
facilitate other types of online payments, and our business and operating results could be materially adversely
affected.
Form 10-K