Juno 2013 Annual Report Download - page 19

Table of Contents
As discussed in the preceding risk factor, we have been cooperating with the Attorneys General of various states in connection with their inquiries
and investigations of, among other things, the privacy policies of our Classmates.com business. Becoming subject to the regulatory and enforcement
efforts of the FTC, a state agency or other governmental authority could have a material adverse effect on our ability to collect demographic and personal
information from users, which, in turn, could have a material adverse effect on our marketing efforts, business, financial condition, results of operations,
and cash flows. In addition, the adverse publicity regarding the existence or results of an investigation could have an adverse impact on customers'
willingness to use our websites and services and thus could adversely impact our future revenues.
Our international businesses must also comply with data protection and privacy laws of the applicable jurisdictions. If we or any of the third-party
services on which we rely fail to transmit customer information and payment details in a secure manner, or if they otherwise fail to protect customer
privacy in online transactions or if they transfer personal information without complying with certain required conditions, then we risk being exposed to
civil and criminal liability, as well as claims from individuals alleging damages as a result of the alleged non-compliance. We may also be required to
alter our data collection and use practices. Any of the foregoing could have a material adverse effect on our business, financial condition, results of
operations, and cash flows.
Our business is subject to online security risks and a security breach or inappropriate access to, or use of, our networks, computer systems or
services or those of third-party vendors could expose us to liability, claims and a loss of revenue.
The success of our business depends on the security of our networks and, in part, on the security of the network infrastructures of our third-party
vendors. In connection with conducting our business in the ordinary course, we store and transmit member information, including personally
identifiable information. Unauthorized or inappropriate access to, or use of, our networks, computer systems or services, whether intentional,
unintentional or as a result of criminal activity, could potentially jeopardize the security of confidential information, including credit card information, of
our members and of third parties. A number of other websites have publicly disclosed breaches of their security, some of which have involved
sophisticated and highly targeted attacks on portions of their sites. Because the techniques used to obtain unauthorized access, disable or degrade
service, or sabotage systems change frequently and often are not recognized until launched against a target, we may be unable to anticipate these
techniques or to implement adequate preventative measures. If an actual or perceived breach of our security occurs, the perception of the effectiveness of
our security measures could be harmed and we could lose members or vendors. A party that is able to circumvent our security measures could
misappropriate our proprietary information or the information of our members, cause interruption in our operations, or damage our computers or those
of our members.
A significant number of our members authorize us to bill their payment card accounts (credit or debit) directly for all amounts charged by us. These
members provide payment card information and other personally identifiable information which, depending on the particular payment plan, may be
maintained to facilitate future payment card transactions. We rely on third-party and internally-developed encryption and authentication technology to
provide the security and authentication to effectively secure transmission of confidential information, including payment card numbers. Advances in
computer capabilities, new discoveries in the field of cryptography or other developments may result in the technology used by us to protect transaction
data being breached or compromised. Non-technical means, for example, actions by an employee, can also result in a data breach. Under payment card
rules and our contracts with our card processors, if there is a breach of payment card information that we store, we could be liable to the banks that issue
the payment cards for their related expenses and penalties. In addition, if we fail to follow payment card industry security standards, even if there is no
compromise of customer information, we could incur significant fines or lose our ability to give our
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