Expedia 2014 Annual Report Download - page 23

A failure to comply with current laws, rules and regulations or changes to such laws, rules and
regulations and other legal uncertainties may adversely affect our business, financial performance, results
of operations or business growth.
Our business and financial performance could be adversely affected by unfavorable changes in or
interpretations of existing laws, rules and regulations or the promulgation of new laws, rules and regulations
applicable to us and our businesses, including those relating to travel licensing, the internet and online
commerce, internet advertising and price display, consumer protection, anti-corruption, anti-trust and
competition, economic and trade sanctions, tax, banking, data security and privacy. As a result, regulatory
authorities could prevent or temporarily suspend us from carrying on some or all of our activities or otherwise
penalize us if our practices were found not to comply with applicable regulatory or licensing requirements or any
binding interpretation of such requirements. Unfavorable changes or interpretations could decrease demand for
our products and services, limit marketing methods and capabilities, affect our margins increase costs and/or
subject us to additional liabilities.
For example, there are, and will likely continue to be, an increasing number of laws and regulations
pertaining to the internet and online commerce that may relate to liability for information retrieved from or
transmitted over the internet, display of certain taxes and fees, online editorial and user-generated content, user
privacy, behavioral targeting and online advertising, taxation, liability for third-party activities and the quality of
products and services. Furthermore, the growth and development of online commerce may prompt calls for more
stringent consumer protection laws and more aggressive enforcement efforts, which may impose additional
burdens on online businesses generally.
Likewise, the SEC, Department of Justice (“DOJ”) and Office of Foreign Assets Controls (“OFAC”), as
well as foreign regulatory authorities, have continued to increase the enforcement of economic and trade
regulations and anti-corruption laws, across industries. U.S. trade sanctions relate to transactions with designated
foreign countries, including Cuba, Iran, Sudan and Syria, and nationals and others of those countries, as well as
certain specifically targeted individuals and entities. We believe that our activities comply with OFAC trade
regulations and anti-corruption regulations, including the Foreign Corrupt Practices Act (“FCPA”) and the UK
Bribery Act. As regulations continue to evolve and regulatory oversight continues to increase, we cannot
guarantee that our programs and policies will be deemed compliant by all applicable regulatory authorities. In the
event our controls should fail or are found to be out of compliance for other reasons, we could be subject to
monetary damages, civil and criminal money penalties, litigation and damage to our reputation and the value of
our brands.
We also have been subject, and we will likely be subject in the future, to inquiries from time to time from
regulatory bodies concerning compliance with consumer protection, competition, tax and travel industry-specific
laws and regulations. The failure of our businesses to comply with these laws and regulations could result in
fines and/or proceedings against us by governmental agencies and/or consumers, which if material, could
adversely affect our business, financial condition and results of operations. Further, if such laws and regulations
are not enforced equally against other competitors in a particular market, our compliance with such laws may put
us a competitive disadvantage vis-à-vis competitors who do not comply with such requirements.
The promulgation of new laws, rules and regulations, or the new interpretation of existing laws, rules and
regulations, in each case that restrict or otherwise unfavorably impact the ability or manner in which we provide
travel services could require us to change certain aspects of our business, operations and commercial
relationships to ensure compliance, which could decrease demand for services, reduce revenues, increase costs
and/or subject the company to additional liabilities.
For example, in July 2012, the United Kingdom Office of Fair Trading (“OFT”), the competition authority
in the United Kingdom, issued a Statement of Objections alleging that Expedia and Booking.com entered into
separate agreements with InterContinental Hotels Group PLC (“IHG”) that restricted each online travel
company’s ability to discount the price of IHG hotel rooms. The OFT limited its investigation to a small number
of companies, but has stated that the investigation is likely to have wider implications for the industry within the
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