Home Shopping Network 2011 Annual Report Download - page 14

The continued or permanent inability to broadcast the HSN television networks would result in lost
customers and lost sales.
Our success is dependent upon the continued ability of HSN to transmit the HSN television networks to
broadcast and pay television operators from its satellite uplink facilities, which transmission is subject to the
Federal Communications Commission (“FCC”) compliance. HSN has entered into two satellite transponder
leases to provide for continued carriage of the HSN television networks on a replacement transponder and/or
replacement satellite, as applicable, in the event of a failure of the transponder and/or satellite. Although we
believe that every reasonable measure is being taken to ensure continued satellite transmission capability,
termination or interruption of satellite transmissions may occur.
The processing, storage, use and disclosure of personal data could give rise to liabilities as a result of
governmental regulation, conflicting legal requirements or differing views of personal privacy rights.
In the processing of consumer transactions, we receive, transmit and store a large volume of personally
identifiable information and other user data. The sharing, use, disclosure and protection of this information are
governed by the privacy and data security policies maintained by us. Moreover, there are federal, state and
international laws regarding privacy and the storing, sharing, use, disclosure and protection of personally
identifiable information and user data. Specifically, personally identifiable information is increasingly subject to
legislation and regulations in numerous jurisdictions around the world, the intent of which is to protect the
privacy of personal information that is collected, processed and transmitted in or from the governing jurisdiction.
We could be adversely affected if legislation or regulations are expanded to require changes in business practices
or privacy policies, or if governing jurisdictions interpret or implement their legislation or regulations in ways
that negatively affect our business, financial condition and results of operations.
We are subject to online and other cyber security risks and cyber incidents, including security and data
breaches and identity theft.
To succeed, we must be able to provide for secure transmission of confidential information over public
networks. We have observed an increased number of cyber attacks that include gaining unauthorized access to
digital systems for purposes of misappropriating assets or sensitive information. Our failure, and/or the failure by
the various third party vendors and service providers with which we do business, to comply with applicable
privacy policies or federal, state or similar international laws and regulations or any compromise of security that
results in the unauthorized release of personally identifiable information or other user data could damage the
reputation of our businesses, discourage potential users from trying our products and services and/or result in
fines and/or proceedings by governmental agencies and/or consumers, one or all of which could adversely affect
our business, financial condition and results of operations. Any penetration of network security or other
misappropriation or misuse of personal consumer information could cause interruptions in the operations of our
businesses and subject us to increased costs, litigation and other liabilities. Security and data breaches could also
significantly damage our reputation with consumers and third parties with whom we do business. We may be
required to expend significant capital and other resources to protect against and remedy any potential or existing
security and data breaches and their consequences. We also face risks associated with security and data breaches
affecting third parties with which we are affiliated or otherwise conduct business online.
System interruption and the lack of integration and redundancy in these systems and infrastructures may
adversely affect our ability to operate websites, process and fulfill transactions, respond to customer inquiries
and generally maintain cost-efficient operations.
We use the internet, mobile devices, social networking and other online activities to connect with our
customers. Our success depends, in part, on our ability to maintain the integrity of our systems and
infrastructures, including websites, information and related systems, call centers and fulfillment facilities. We
may experience occasional system interruptions that make some or all systems or data unavailable or prevent our
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