Enom 2012 Annual Report Download - page 35

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Certain U.S. and foreign laws could subject us to claims or otherwise harm our business.
We are subject to a variety of laws in the U.S. and abroad that may subject us to claims or other remedies. Our failure to
comply with applicable laws may subject us to additional liabilities, which could adversely affect our business, financial
condition and results of operations. Laws and regulations that are particularly relevant to our business address:
• privacy;
• freedom of expression;
• information security;
• pricing, fees and taxes;
• content and the distribution of content, including liability for user reliance on such content;
• intellectual property rights, including secondary liability for infringement by others;
• taxation;
• domain name registration; and
• online advertising and marketing, including email marketing and unsolicited commercial email.
Many applicable laws were adopted prior to the advent of the Internet and do not contemplate or address the unique issues
of the Internet. Moreover, the applicability and scope of the laws that do address the Internet remain uncertain. For example,
the laws relating to the liability of providers of online services are evolving. Claims have been either threatened or filed against
us under both U.S. and foreign laws for defamation, copyright infringement, patent infringement, privacy violations,
cybersquatting and trademark infringement. In the future, claims may also be alleged against us based on tort claims and other
theories based on our content, products and services or content generated by our users.
We receive, process and store large amounts of personal data of users on our owned and operated websites and from our
freelance creative professionals. Our privacy and data security policies govern the 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 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.