Experian 2014 Annual Report Download - page 29

25 Strategic report • Protecting our business
OTHER RISKS
EXPOSURE TO MATERIALLY ADVERSE LITIGATION, INCLUDING CLAIMS OF INTELLECTUAL PROPERTY
INFRINGEMENT OR VIOLATION OF PRIVACY LAWS
We are involved in a number of pending and threatened litigation claims in the US and Brazil, including a number of class actions.
Performance indicator
EBIT and general litigation
trends
Strategic alignment
• Product innovation
• New customer segments
• Geographic expansion
Further information
• Corporate governance
report – Audit Committee
Report
• Financial statements
note 45 describing
contingencies for
pending and threatened
litigation claims
Description of risk
• Litigation can cover a number of areas, including
intellectual property, privacy, antitrust, general
commercial disputes and employment.
Potential impact
• An adverse outcome in any of these claims could result
in civil or criminal penalties, as well as negative publicity
which may encourage further claims.
• We may incur significant costs in handling claims
and may suffer reduced revenue if business practices
require amendment.
How we manage this risk
• We monitor third-party patents and patent applications.
• We carry out freedom-to-operate analyses.
• We vigorously defend all pending and threatened litigation
claims, employing internal and external counsel to
effectively manage and dispose of proceedings.
• We analyse the causes of cases, to identify any potential
changes in our business processes and policies.
• We maintain insurance cover, where feasible and appropriate.
Change from 2013
Increasing risk
2014 update
In Brazil, the volume of lawsuits continues
to grow, primarily claims challenging
Serasa’s consumer credit score product.
This is a significant, industry-wide, issue
and the merits of the principles of these
cases are due to be considered by the
Superior Tribunal of Justice in the next
twelve months.
The number of US class action lawsuits
has moderately increased while the
volume of individual consumer litigation
continues to increase year over year.
This is attributable to increased filings of
small claims matters and to heightened
media coverage of the US consumer
bureau industry.
ACQUIRING BUSINESSES OR ENTERING INTO STRATEGIC PARTNERSHIPS MAY NOT PRODUCE THE DESIRED
FINANCIAL OR OPERATING RESULTS
We continue to expand our global reach and to extend our capabilities through a combination of acquisitions, strategic alliances and
joint ventures.
Performance indicator
EBIT and ROCE
Strategic alignment
• Product innovation
• New customer segments
• Geographic expansion
Further information
• Strategic report
discussion of how we
extend our global lead
through geographic
expansion
• Financial statements
note 40 for a description
of the financial impact of
acquisitions on the Group
Description of risk
• It may be difficult to assimilate new businesses and
their products, services, technologies and personnel
into our operations.
• Partners in an alliance or joint venture may have
different objectives or different cultures and
management styles resulting in poor integration
and co-operation.
Potential impact
• Difficult integrations may disrupt our ongoing business,
distract management and employees, increase expenses
and otherwise materially and adversely affect our
operating results and financial condition.
How we manage this risk
• We rigorously assess all acquisitions and partnerships,
using both in-house experts and professional advisers.
• We conduct extensive post-acquisition and organic
investment reviews, to ensure performance remains
consistent with the business plan.
• We conduct performance reviews of all our businesses
and, as a result, sometimes withdraw from low-growth
or low-return markets.
Change from 2013
Stable
2014 update
Our investments in Russia, India and
Australia in joint ventures are providing our
consumer credit bureaux with data and
regional expertise needed for their ongoing
success. We invested in four businesses
that diversify our product offerings, such
as in fraud management and the US
healthcare payments market; our risk
profile was unchanged due to our sound
integration practices.
P74
P161
P158