Overstock.com 2005 Annual Report Download - page 29

If one or more states successfully assert that we should collect sales or other taxes on the sale of our merchandise or the
merchandise of third parties that we offer for sale on our Websites, our business could be harmed.
We do not currently collect sales or other similar taxes for physical shipments of goods into states other than Utah and Indiana.
One or more local, state or foreign jurisdictions may seek to impose sales tax collection obligations on us and other out-of-state
companies that engage in online commerce. Our business could be adversely affected if one or more states or any foreign country
successfully asserts that we should collect sales or other taxes on the sale of our merchandise.
Existing or future government regulation could harm our business.
We are subject to the same federal, state and local laws as other companies conducting business on the Internet. Today there are
relatively few laws specifically directed towards conducting business on the Internet. However, due to the increasing popularity and
use of the Internet, many laws and regulations relating to the Internet are being debated at the state and federal levels. These laws and
regulations could cover issues such as user privacy, freedom of expression, pricing, fraud, quality of products and services, taxation,
advertising, intellectual property rights and information security. Applicability to the Internet of existing laws governing issues such as
property ownership, copyrights and other intellectual property issues, taxation, libel, obscenity and personal privacy could also harm
our business. For example, United States and foreign laws regulate our ability to use customer information and to develop, buy and
sell mailing lists. The vast majority of these laws was adopted prior to the advent of the Internet, and do not contemplate or address the
unique issues raised thereby. Those laws that do reference the Internet are only beginning to be interpreted by the courts and their
applicability and reach are therefore uncertain. These current and future laws and regulations could harm our business, results of
operation and financial condition.
Laws or regulations relating to privacy and data protection may adversely affect the growth of our Internet business or our
marketing efforts.
We are subject to increasing regulation at the federal, state and international levels relating to privacy and the use of personal user
information. For example, we are subject to various telemarketing laws that regulate the manner in which we may solicit future
suppliers and customers. Such regulations, along with increased governmental or private enforcement, may increase the cost of
growing our business. In addition, many jurisdictions have laws that limit the uses of personal user information gathered online or
offline or require companies to establish privacy policies. The Federal Trade Commission has adopted regulations regarding the
collection and use of personal identifying information obtained from children under 13. Proposed legislation in this country and
existing laws in foreign countries require companies to establish procedures to notify users of privacy and security policies, obtain
consent from users for collection and use of personal information, and/or provide users with the ability to access, correct and delete
personal information stored by us. Additional legislation regarding data security and privacy has been proposed in Congress. These
data protection regulations may restrict our ability to collect demographic and personal information from users, which could be costly
or harm our marketing efforts, and could require us to implement new and potentially costly processes, procedures and/or protective
measures.
Risks Relating to the Securities Markets and Ownership of Our Securities
The price of our securities may be volatile and you may lose all or a part of your investment.
Our common stock has been publicly traded only since May 30, 2002. The market price of our common stock has been subject to
significant fluctuations since the date of our initial public offering. These fluctuations could continue. It is possible that in some future
periods our results of operations may be below the expectations of public market analysts and investors. If this occurs, the market
price of our
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