Juno 2013 Annual Report Download - page 18

Table of Contents
operations to fluctuate significantly from period to period and could materially and adversely affect our business, financial condition, results of
operations, and cash flows. In addition, we also file actions against third parties from time to time for various reasons, including, without limitation, to
protect our intellectual property rights, to enforce our contractual rights, or to make other business-related claims. The legal fees, costs and expenses
associated with these actions may be significant, and if we were to lose these actions, we may be required to pay the other party's legal fees, costs and
expenses, which also may be significant and could materially and adversely affect our business, financial condition, results of operations, and cash
flows.
Various governmental agencies have in the past asserted claims, instituted legal actions, inquiries or investigations, or imposed obligations relating
to our business practices, such as our marketing, billing, customer retention, renewal, cancelation, refund, or disclosure practices, and they may continue
to do so in the future. We have received civil investigative demands and subpoenas, as applicable, from the Federal Trade Commission ("FTC") and the
Attorneys General of various states, primarily regarding their respective investigations into certain former post-transaction sales practices and certain of
our marketing, billing, renewal, and privacy practices and disclosures. We have been cooperating with these investigations. However, the outcome of
these or any other governmental investigations or their potential implications for our business are uncertain. We may not prevail in existing or future
claims and any judgment against us or settlement or resolution of such claims may involve the payment of significant sums, including damages, fines,
penalties, or assessments, or changes to our business practices. For example, in 2010, Classmates, Inc. (then known as Classmates Online, Inc.) paid
$960,000 to resolve an investigation of the Attorney General for the State of New York related to its former post-transaction sales practices. Defending
against lawsuits, inquiries and investigations also involves significant expense and diversion of management's attention and resources from other
matters. There are no assurances that additional governmental investigations or other legal actions will not be instituted in connection with our former
post-transaction sales practices or other current or former business practices. Enforcement actions or changes in enforcement policies and procedures
could result in changes to our business practices, as well as significant damages, fines, penalties or assessments, which could decrease our revenues or
increase the costs of operating our business. To the extent that our services and business practices change as a result of claims or actions by
governmental agencies or private parties, or we are required to pay significant sums, including damages, fines, penalties, or assessments, our business,
financial condition, results of operations, and cash flows could be materially and adversely affected. For more information, see Note 13 "Contingencies
—Legal Matters" of the Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this Annual Report on Form 10-
K.
Governmental regulation of the collection and use of personal information or our failure to comply with these regulations could harm our
businesses.
The FTC has regulations regarding the collection and use of personal information obtained from individuals when accessing websites, with
particular emphasis on access by minors. In addition, other governmental authorities have regulations to govern the collection and use of personal
information that may be obtained from customers or visitors to websites. These regulations include requirements that procedures be established to
disclose and notify users of our websites or mobile apps of our privacy and security policies, obtain consent from users for collection and use of
personal information and provide users with the ability to access, correct or delete personal information stored by us. In addition, the FTC and other
governmental authorities have made inquiries and investigations of companies' practices with respect to their users' personal information collection and
dissemination practices to confirm these are consistent with stated privacy policies and to determine whether precautions are taken to secure consumers'
personal information. The FTC and certain state agencies also have made inquiries, and, in a number of situations, brought actions against companies to
enforce the privacy policies of these companies, including policies relating to security of consumers' personal information.
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