eBay 2015 Annual Report Download - page 26

offerings, and the imposition of any regulations on us or our users may harm our business. In addition, we may
be subject to multiple overlapping legal or regulatory regimes that impose conflicting requirements on us (e.g., in
cross-border trade). Our alleged failure to comply with foreign laws could subject us to penalties ranging from
criminal prosecution to significant fines to bans on our services, in addition to the significant costs we may incur
in defending against such actions.
We are regularly subject to general litigation, regulatory disputes, and government inquiries.
We are regularly subject to claims, lawsuits (including class actions and individual lawsuits), government
investigations, and other proceedings involving competition and antitrust, intellectual property, privacy,
consumer protection, accessibility claims, securities, tax, labor and employment, commercial disputes, content
generated by our users, services and other matters. The number and significance of these disputes and inquiries
have increased as our company has grown larger, our businesses have expanded in scope and geographic reach,
and our products and services have increased in complexity.
The outcome and impact of such claims, lawsuits, government investigations, and proceedings cannot be
predicted with certainty. Regardless of the outcome, such investigations and proceedings can have an adverse
impact on us because of legal costs, diversion of management resources, and other factors. Determining reserves
for our pending litigation is a complex, fact-intensive process that is subject to judgment calls. It is possible that a
resolution of one or more such proceedings could require us to make substantial payments to satisfy judgments,
fines or penalties or to settle claims or proceedings, any of which could harm our business. These proceedings
could also result in reputational harm, criminal sanctions, consent decrees, or orders preventing us from offering
certain products, or services, or requiring a change in our business practices in costly ways, or requiring
development of non-infringing or otherwise altered products or technologies. Any of these consequences could
harm our business.
We are subject to regulatory activity and antitrust litigation under competition laws.
We are subject to scrutiny by various government agencies under U.S. and foreign laws and regulations,
including competition laws. Some jurisdictions also provide private rights of action for competitors or consumers
to assert claims of anti-competitive conduct. Other companies and government agencies have in the past and may
in the future allege that our actions violate the antitrust or competition laws of the United States, individual
states, the European Commission or other countries, or otherwise constitute unfair competition. An increasing
number of governments are regulating competition law activities, including increased scrutiny in large markets
such as China. Our business partnerships or agreements or arrangements with customers or other companies
could give rise to regulatory action or antitrust litigation. Some regulators, particularly those outside of the
United States, may perceive our business to be used so broadly that otherwise uncontroversial business practices
could be deemed anticompetitive. Certain competition authorities have conducted market studies of our
industries. Such claims and investigations, even if without foundation, may be very expensive to defend, involve
negative publicity and substantial diversion of management time and effort and could result in significant
judgments against us or require us to change our business practices.
We are subject to patent litigation.
We have repeatedly been sued for allegedly infringing other parties’ patents. We are a defendant in a
number of patent suits and have been notified of several other potential patent disputes. We expect that we will
increasingly be subject to patent infringement claims because, among other reasons:
• our products and services continue to expand in scope and complexity;
• we continue to expand into new businesses, including through acquisitions; and
• the universe of patent owners who may claim that we, any of the companies that we have acquired, or
our customers infringe their patents, and the aggregate number of patents controlled by such patent
owners, continues to increase.
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