Epson 2007 Annual Report Download - page 53

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Annual Report 2007
Also, Epson might be held liable to a customer and might incur expenses for repairs or corrections on
the grounds that it did not adequately display or explain an Epson product’s performance. Furthermore, if
such a problem in quality arises with respect to Epson products, Epson might lose the trust of others in its
products, lose major customers or experience a drop in demand for those products, any of which might
adversely affect Epson’s results.
(18) Epson is vulnerable to risks of problems arising relating to the environment
Epson is subject, both in Japan and overseas, to various environmental regulations concerning industrial
waste and emissions into the atmosphere that arise during the manufacturing process. Environmental
conservation activities are one of Epson’s most important management policies, and it is proactively
engaged in environmental conservation activities on all fronts, by developing and manufacturing products
that have less of a burden on the environment, reducing the amount of energy used, promoting the recov-
ery and recycling of used products and improving environmental management systems.
To date, Epson has not had any serious environmental issue arising as a result of any of these efforts,
but there is a possibility that in the future Epson might be affected by a compensation claim, incur
expenses (such as cleaning expenses), receive a fine, be ordered to cease production or be otherwise
affected as a result of environmental damage or that new regulations might be brought in requiring Epson
to pay considerable expenses, and, if such a situation should occur, Epson’s results could be adversely
affected.
(19) Epson faces risks related to procedures taken under anti-monopoly laws
There are occasions when Epson’s businesses are subject to procedures under anti-monopoly laws or
ordinances, such as the Law Concerning the Prohibition of Private Monopolization and Maintenance of
Fair Trade. Overseas authorities also sometimes conduct surveys or gather information on specific fields of
business, and, as a part of that effort, Epson will occasionally participate in, for example, surveys of a
general nature related to market situations or sales methods, etc. If Epson is subject to such surveys or
procedures, its sales activities might be interfered with and they might adversely affect Epson’s results.
In December 2006, Epson received notices to respond to inquiries from the Japanese Fair Trade
Commission and competition authorities in the United States, the European Union and others relating to
allegations concerning a TFT-LCD price-fixing cartel. Epson is presently responding to these inquiries.
These investigations are at an early stage and it is difficult to forecast the results of these inquiries, includ-
ing the outcome or the timing.
(20) Epson is at risk of material legal actions being brought against it
Epson conducts its businesses both in Japan and overseas; its primary businesses being the develop-
ment, manufacture and sale of information-related equipment, electronic devices and precision equip-
ment. Given the special nature of its businesses, there is a possibility that an action could be brought or
legal proceedings could be started against it regarding, for example, intellectual property rights, product
liability, anti-monopoly laws or environmental regulations. Should that happen, society’s trust in Epson
might be harmed, and resolving and responding to the issue might entail considerable expense and man-
agement resources. The results of the action or legal proceedings might also adversely affect Epson’s
results or the development of Epson’s business in the future.