Zynga 2014 Annual Report Download - page 38

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one jurisdiction to another and may conflict with other rules or our practices. It is also possible that new laws, policies, legal obligations or
industry codes of conduct may be passed, or existing laws, policies, legal obligations or industry codes of conduct may be interpreted in such a
way that could prevent us from being able to offer services to citizens of a certain jurisdiction or may make it more costly or difficult for us to do
so. For example, if a country enacted legislation that required data of their citizens gathered by online services to be held within the country, we
may not be able to comply with such legislation or compliance could be so difficult or costly that we chose not to stop offering services to
citizens of that country. Any failure or perceived failure by us to comply with our privacy policies, our privacy-related obligations to players or
other third parties, or our privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of
personally identifiable information or other player data, may result in governmental enforcement actions, litigation or public statements against
us by consumer advocacy groups or others and could cause our players to lose trust in us, which could have an adverse effect on our business.
Additionally, if third parties we work with, such as players, vendors or developers, violate applicable laws or our policies, such violations may
also put our players’ information at risk and could in turn have an adverse effect on our business.
In this area many states have passed laws requiring notification to players 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 practically implement. The costs of compliance with these laws may increase in the future as a result of changes
in interpretation. Moreover, in the areas of privacy, information security, data protection, consumer protection and protection of minors, foreign
laws and regulations are often more restrictive than those in the United States. In particular, the European Union and its member states
traditionally have taken broader views as to types of data that are subject to data protection, and have imposed legal obligations on companies in
this regard. Any failure on our part to comply with laws in these areas hacker may subject us to significant liabilities.
Our business is subject to a variety of other U.S. and foreign laws, many of which are unsettled and still developing and which could subject
us to claims or otherwise harm our business.
We are subject to a variety of laws in the United States and abroad, including state and Federal laws regarding consumer protection,
electronic marketing, protection of minors, data protection, competition, taxation, intellectual property, export and national security, that are
continuously evolving and developing. The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may
be conflicting, particularly laws outside the United States. There is a risk that these laws may be interpreted in a manner that is not consistent
with our current practices, and could have an adverse effect on our business. For example, 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. It is also likely that as our business grows and evolves and our games are
played in a greater number of countries, we will become subject to laws and regulations in additional jurisdictions. 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 ambiguous, still evolving and could be interpreted in ways that could harm our business or expose us to liability. In addition,
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. If new casino-themed regulations are imposed certain of our casino-themed games, including Zynga Poker, Zynga Poker Classic
and Hit It Rich! Slots , may become subject to the rules and regulations and expose us to civil and criminal penalties if we do not comply.
Heightened regulation could increase the cost of running our casino games, make our games more difficult to access, decrease our user base or
otherwise harm our business, bookings or revenue. Our business includes real money online poker and casino games offerings in the United
Kingdom through an agreement with bwin.party. RMG is subject to stringent, complicated and rapidly changing licensing and regulatory
requirements, both federally and in each state, as well as internationally. Although we
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