Juno 2013 Annual Report Download - page 20

Table of Contents
members and customers the option of using payment cards. If we were unable to accept payment cards, our businesses would be seriously harmed.
We may need to expend significant resources to protect against security breaches or to address problems caused by breaches. Security breaches,
including any breach related to us or the parties with which we have commercial relationships, could damage our reputation and expose us to a risk of
loss, litigation and possible liability. We cannot assure you that the security measures we take will be effective in preventing these types of activities. We
also cannot assure you that the security measures of our third-party vendors, including network providers, providers of customer and billing support
services, and other vendors, will be adequate. In addition to potential legal liability, these activities may adversely impact our reputation or our revenues
and may interfere with our ability to provide our services and products, all of which could adversely impact our business, financial condition, results of
operations, and cash flows. In addition, the coverage and limits of our insurance policies may not be adequate to reimburse us for losses caused by
security breaches. We believe the recent impact of large-scale retail credit card fraud may impact our ability to bill customers with card-on-file efficiency.
Changes in laws and regulations and new laws and regulations may adversely affect our business, financial condition, results of operations, and
cash flows.
We are subject to a variety of international, federal, state, and local laws and regulations, including, without limitation, those relating to taxation,
bulk email or "spam," advertising, including, without limitation, targeted or behavioral advertising, user privacy and data protection, consumer
protection, antitrust, export, and unclaimed property. Compliance with the various laws and regulations, which in many instances are unclear or
unsettled, is complex. New laws and regulations, such as those being considered or recently enacted by certain states, the federal government or
international authorities related to automatic-renewal practices, spam, user privacy, targeted or behavioral advertising, and taxation, could impact our
revenues or certain of our business practices or those of our advertisers. For example, our compliance with Canada's new anti-spam legislation, which
will go into effect in July 2014 and will require the consent of a Canadian consumer in order to send certain types of emails to such consumer, may
impact our ability to email some of our members. Any changes in the laws and regulations applicable to us, the enactment of any additional laws or
regulations, or the failure to comply with, or increased enforcement activity of, such laws and regulations, could significantly impact our services and
products, our costs, or the manner in which we or our advertisers conduct business, all of which could adversely impact our business, financial
condition, results of operations, and cash flows and cause our business to suffer.
Our social networking and loyalty marketing services rely heavily on email campaigns, and any disruptions or restrictions on the sending of
emails or increase in the associated costs could adversely affect our business, financial condition, results of operations, and cash flows.
Our emails have historically generated the majority of the traffic on our social networking websites and are a key driver of member activity for our
loyalty marketing service. A significant number of members of our social networking and loyalty marketing services elect to opt-out of receiving certain
types of emails. New laws, such as Canada's new anti-spam legislation, may impact our ability to email some of our members. Without the ability to
email these members, we have very limited means of inducing these members to return to our websites and utilize our services. In addition, each month,
a significant number of email addresses for members of our social networking and loyalty marketing services become invalid. This disrupts our ability
to email these members and also prevents our social networking members from being able to contact these members, which is one of the reasons why
members use our services. An increase in the number of members to whom we are not able to send emails, or who elect to not receive, are unable to
receive, or do not open, our emails could adversely affect our business, financial condition, results of operations, and cash flows. From time to time,
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