Enom 2010 Annual Report Download - page 41

Table of Contents
collection, use, sharing, disclosure and protection of this data. The storing, sharing, use, disclosure and protection of personal information and user data are
subject to federal, state and international privacy laws, the purpose of which is to protect the privacy of personal information that is collected, processed and
transmitted in or from the governing jurisdiction. If requirements regarding the manner in which certain personal information and other user data are
processed and stored change significantly, our business may be adversely affected, impacting our financial condition and results of operations. In addition, we
may be exposed to potential liabilities as a result of differing views on the level of privacy required for consumer and other user data we collect. We may also
need to expend significant resources to protect against security breaches, including encrypting personal information, or remedy breaches after they occur,
including notifying each person whose personal data may have been compromised. Our failure or the failure of various third-party vendors and service
providers to comply with applicable privacy policies or applicable laws and regulations or any compromise of security that results in the unauthorized release
of personal information or other user data could adversely affect our business, revenue, financial condition and results of operations.
Our business operations in countries outside the United States are subject to a number of United States federal laws and regulations, including restrictions
imposed by the Foreign Corrupt Practices Act, or FCPA, as well as trade sanctions administered by the Office of Foreign Assets Control, or OFAC, and the
Commerce Department. The FCPA is intended to prohibit bribery of foreign officials or parties and requires public companies in the United States to keep
books and records that accurately and fairly reflect those companies' transactions. OFAC and the Commerce Department administer and enforce economic
and trade sanctions based on U.S. foreign policy and national security goals against targeted foreign states, organizations and individuals.
If we fail to comply with these laws and regulations, we could be exposed to claims for damages, financial penalties, reputational harm, incarceration of
our employees or restrictions on our operations, which could increase our costs of operations, reduce our profits or cause us to forgo opportunities that would
otherwise support our growth.
We are subject to a number of risks related to credit card payments we accept. If we fail to be in compliance with applicable credit card rules and
regulations, we may incur additional fees, fines and ultimately the revocation of the right to accept credit card payments, which would have a material
adverse effect on our business, financial condition or results of operations.
Many of the customers of our Content & Media and Registrar service offerings pay amounts owed to us using a credit card or debit card. For credit and
debit card payments, we pay interchange and other fees, which may increase over time and raise our operating expenses and adversely affect our net income.
We are also subject to payment card association operating rules, certification requirements and rules governing electronic funds transfers, which could change
or be reinterpreted to make it difficult or impossible for us to comply. We believe we are compliant in all material respects with the Payment Card Industry
Data Security Standard, which incorporates Visa's Cardholder Information Security Program and MasterCard's Site Data Protection standard. However, there
is no guarantee that we will maintain such compliance or that compliance will prevent illegal or improper use of our payment system. If we fail to comply
with these rules or 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. A failure to adequately control fraudulent credit card transactions would result in significantly higher credit card-related costs and could have a
material adverse effect on our business, revenue, financial condition and results of operations.
39