Zynga 2014 Annual Report Download - page 13

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Table of Contents
Government Regulation
We are subject to a number of foreign and domestic laws and regulations that affect companies conducting business on the Internet, many
of which are still evolving and could be interpreted in ways that could harm our business. In the United States and internationally, 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,
including actions based on invasion of privacy and other torts, unfair competition, copyright and trademark infringement, and other theories
based on the nature and content of the materials searched, the ads posted, or the content provided by users. Any court ruling or other
governmental action that imposes liability on providers of online services for the activities of their users and other third parties could harm our
business. We are potentially subject to a number of foreign and domestic laws and regulations that affect the offering of certain types of content,
such as that which depicts violence, many of which are ill defined, still evolving and could be interpreted in ways that could harm our business
or expose us to liability.
In addition, rising concern about the use of social networking technologies for illegal conduct, such as the unauthorized dissemination of
national security information, money laundering or supporting terrorist activities may in the future produce legislation or other governmental
action that could require changes to our games or restrict or impose additional costs upon the conduct of our business.
Some of our games or features are based upon traditional casino games, such as poker. We have structured and operate these games and
features, including New Zynga Poker and Zynga Poker Classic , with the gambling laws in mind and believe that these games or features do not
constitute gambling. There are ongoing academic, political and regulatory discussions in the United States and other jurisdictions regarding
whether social casino applications should be subject to a higher level or different type of regulation than other social game applications and, if
so, what this regulation should include.
We also offer our players various types of sweepstakes, giveaways and promotion opportunities. We are subject to laws in a number of
jurisdictions concerning the operation and offering of such activities, many of which are still evolving and could be interpreted in ways that
could harm our business. Any court ruling or other governmental action that imposes liability on providers of online services could result in
criminal or civil liability and could harm our business.
In the area of information security and data protection, many states have passed laws requiring notification to users when there is a security
breach for personal data, such as the 2002 amendment to California’s Information Practices Act, or requiring the adoption of minimum
information security standards that are often vaguely defined and difficult to implement. 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.
We are also subject to federal, state and foreign laws regarding privacy and protection of player data, including the collection of data from
minors. We post our Privacy Policy and Terms of Service online, in which we describe our practices concerning the use, transmission and
disclosure of player data. Any failure by us to comply with our posted privacy policy or privacy related laws and regulations could result in
proceedings against us by governmental authorities or others, which could harm our business. In addition, the interpretation of many data
protection laws, and their application to the Internet is unclear and in a state of flux. There is a risk that these
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Other Forms of Media and Entertainment: We compete more broadly for the leisure time and attention of our players with providers
of other forms of Internet and mobile entertainment, including social networking, online casual entertainment and music. To the
extent existing or potential players choose to read, watch or listen to online content or streaming video or radio, play interactive video
games at home or on their computer or mobile devices rather than play social games, these content services pose a competitive threat.