Incredimail 2011 Annual Report Download - page 30

When users visit our website or install and use our software, certain "cookies" (pieces of information sent by a web server to a user’
s browser) may be
generated by us and third parties we cooperate with, including our advertisers and may be placed on our customers’
computers. While we believe that our use of
cookies does not result in personal identification, it has been argued that Internet protocol addresses and cookies are intrinsically personally identifiable information
that is subject to privacy standards. In addition, the impact of new regulation in the EU means that, regardless of personal identification via cookies (or any similar
devices), there are now obligations to inform consumers how cookies are used and provide information about cookies. Unless limited exceptions apply we will now
only be able to place a cookie on terminal equipment where the user or subscriber has given their consent. We cannot assure you that our current policies and
procedures will meet these restrictive standards but we will continue to assess our use of cookies, and where necessary, work with third parties serving cookies via our
websites and take steps to provide transparency, as well as assess which solution for obtaining user consent will be most appropriate. The compliance situation is
compounded as not all of EU legislation is currently in force and there are likely to be a number of variations in the approach and regulations. Today we have limited
technical or operational capability to vary our website or practices on a country to country basis. There are no specific laws restricting the use of such cookies in the
United States. While some courts there previously questioned whether placement of cookies on a user’s hard drive is permissible without the user’
s consent, to the best
of our knowledge no liability has been found.
Our approach to privacy and data protection compliance includes both technological solutions and a focus on employee awareness and behavior. We post our
privacy policy and practices concerning cookies and the use and disclosure of user data on our websites. Our websites informs users through our privacy policy what
information we collect about them and about their use of our services as mentioned above, in the EU at least, it is likely that further transparency and consent will be
required in connection with some of our activities which use cookies and similar technologies. We also provide users with the opportunity to opt out of receiving
certain communications from us.
Any failure by us to comply with our posted privacy policy, U.S. Federal Trade Commission requirements or other domestic or international privacy-
related
laws and regulations could result in proceedings by governmental or regulatory bodies that could potentially harm our business, results of operations and financial
condition, or result in private civil actions for damages and equitable relief. In addition, abuse by third parties of the data we collect could potentially subject us to
liability. In addition, the negative public perception, potential reputational damage and associated public concern over privacy practice may equally impact our
business in the event of any adverse publicity around failure to comply or any regulatory investigation into our practices.
In this regard, there are still a large number of legislative proposals before the European Union, as well as before the United States Congress and various state
legislative bodies, regarding privacy and other issues related to our business. Other jurisdictions could also adopt laws and regulations that could adversely impact our
company and business. It is not possible to predict whether or when such laws, regulations and legislation may be adopted, and certain proposals, if adopted, could
harm our business through a decrease in user registrations and revenues. These decreases could be caused by, among other possible provisions, the required use of
disclaimers, mandatory consents or affirmations or other requirements before users can utilize our services.
Israel
Our database, which includes a database of registered users, falls within the definition of a database that requires registration under the Israeli Protection of
Privacy Law 1981 (the “Privacy Law”).
Maintaining a database other than in compliance with the Privacy Law, may subject the owner, holder, manager and operator
to criminal liability and civil liability. We registered our database with the Data Base Registrar on June 21, 2004.
In addition to the registration obligations under the Privacy Law, the Privacy Law also determines that any request for information should be accompanied by
a notice that indicates: whether a person is legally required to expose such information, or that such exposure is subject to such person’
s own will and consent; the
purpose for which the information is requested; and to whom the information is to be delivered and for what purpose. The law also determines that any person is
entitled to inspect any information about him which is kept in a certain data base. It should be stated that violating such requirements can result in imprisonment. The
Privacy Law stipulates that an infringement of privacy is a civil wrong action, and authorizes the court to set compensation of NIS 50,000 (approximately US$14,000)
without proof of injury. The database registrar has been granted with wide authorities in event of violation of the provisions of the law, such as canceling the
registration of a certain database.
The Copyrights Law of 2007 (the “Copyrights Law”)
protects, among others, artistic works, as well as sound recordings and computer programs, foreign
work and moral rights (the right of paternity and the right of integrity). The Copyrights Law set forth the amount for compensation that a court may award to a
claimant without proof of injury, for each copyright or moral right infringement to NIS 100,000, (approximately USD 27,000).
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