Amazon.com 2000 Annual Report Download - page 25

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seek actual, statutory and punitive damages, as well as restitution, on behalf of all users of Alexa Internet’s
Web navigation service, as well as injunctive relief prohibiting Alexa Internet from tracking and storing such
information or disclosing it to third parties. Although the Company disputes the allegations of wrongdoing in
these complaints, there can be no assurance that the Company will prevail in these lawsuits.
In addition, the Federal Trade Commission has requested information and documents regarding Alexa
Internet’s practices and has opened a formal investigative file in connection with its inquiry. The Commission
is seeking to determine whether the Company has engaged in unfair or deceptive acts in connection with the
advertisement and operation of certain services provided by Alexa Internet. The Company is cooperating
voluntarily with the Federal Trade Commission’s investigation.
As previously disclosed in our Quarterly Report on Form 10-Q for the third quarter of 2000, we have
received informal inquiries from the Securities and Exchange Commission Staff with respect to accounting
treatment and disclosures for some of our initial strategic partner transactions and have responded to those
questions. We reviewed our accounting for the transactions with our auditors and the Securities and Exchange
Commission Staff, and we believe our accounting treatment and disclosures were appropriate. We will continue
to cooperate with the Securities and Exchange Commission Staff if they have further questions.
In addition, a number of purported class action complaints were filed by stockholders against the Company
and some of its senior officers in March 2001, in the United States District Court for the Western District of
Washington, alleging that the defendants made false and misleading statements regarding the Company’s
financial and accounting disclosures in 2000 and early 2001, including disclosures regarding some of the
Company’s strategic partner transactions. The complaints further allege that the defendants’ conduct violated
securities laws and seek compensatory damages and injunctive relief against all defendants. The Company
disputes the allegations of wrongdoing in these complaints and intends to vigorously defend itself in these
matters.
Depending on the amount and the timing, an unfavorable resolution of some or all of these matters could
materially affect the Company’s business, future results of operations or cash flows in a particular period.
From time to time, the Company is subject to other legal proceedings and claims in the ordinary course of
business, including claims of alleged infringement of trademarks, copyrights and other intellectual property
rights. The Company currently is not aware of any such legal proceedings or claims that it believes will have,
individually or in the aggregate, a material adverse effect on its business, prospects, financial condition and
operating results.
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted for a vote of stockholders of the Company during the fourth quarter of the year
ended December 31, 2000.
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