Expedia 2015 Annual Report Download - page 25

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, including but not limited to investigations and legal proceedings relating to the travel
industry and, in particular, parity provisions in contracts between hotels and online travel companies, including
Expedia described in Part I, Item 3, Legal Proceedings – Hotel Booking Practices Proceedings and Litigation.
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. We are unable at this time to
predict the timing or outcome of these various investigations and lawsuits or similar future investigations or
lawsuits, and their impact, if any, on our business and results of operations.
In addition, HomeAway has been and continues to be, subject to regulatory development that affect the
vacation rental industry and the ability of companies like us to list those vacation rentals online. For example,
some states and local jurisdictions have adopted or are considering statutes or ordinances that prohibit property
owners and managers from renting certain properties for fewer than 30 consecutive days or otherwise limit their
ability to do so, and other states and local jurisdictions may introduce similar regulations. Some states and local
jurisdictions also have fair housing or other laws governing whether and how properties may be rented, which
they assert apply to vacation rentals. Many homeowners, condominium and neighborhood associations have
adopted rules that prohibit or restrict short-term vacation rentals. In addition, many of the fundamental statutes
and ordinances that impose taxes or other obligations on travel and lodging companies were established before
the growth of the Internet and e-commerce, which creates a risk of these laws being used in ways not originally
intended that could burden property owners and managers or otherwise harm our business.
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.
Furthermore, our future growth may be limited by anti-trust or competition laws. For example, our business
has grown and continues to expand, and, as a consequence, increases in our size and market share may negatively
affect our ability to obtain regulatory approval of proposed acquisitions, investments or significant commercial
arrangements, any of which could adversely affect our ability to grow and compete.
Application of existing tax laws, rules or regulations are subject to interpretation by taxing authorities.
The application of various domestic and international income and non-income tax laws, rules and
regulations to our historical and new products and services is subject to interpretation by the applicable taxing
authorities. These taxing authorities have become more aggressive in their interpretation and/or enforcement of
such laws, rules and regulations over time, as governments are increasingly focused on ways to increase
revenues. This has contributed to an increase in audit activity and harsher stances by tax authorities. As such,
additional taxes or other assessments may be in excess of our current tax reserves or may require us to modify
our business practices to reduce our exposure to additional taxes going forward, any of which could have a
material adverse effect on our business, results of operations and financial condition.
A number of taxing authorities have made inquiries, brought lawsuits and have levied assessments asserting
that we are required to collect and remit hotel occupancy or other taxes, including, but not limited to, the legal
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