ServiceMagic 2010 Annual Report Download - page 22

Table of Contents
internet and related technologies and, as a result, do not contemplate or address the unique issues of the internet and related technologies. Laws
that do reference the internet are being interpreted by the courts, but their applicability and scope remain uncertain. For example, laws relating to
the liability of providers of online services are currently unsettled both within the U.S. and abroad. Claims could be threatened and filed under
both U.S. and foreign law for defamation, libel, slander, invasion of privacy and other tort claims, unlawful activity, copyright and trademark
infringement, or other theories based on the nature and content of the materials searched and the ads posted by our products and services, or
content generated by us and our users.
In addition, the Digital Millennium Copyright Act has provisions that limit, but do not necessarily eliminate, our liability for listing or
linking to third party websites that include materials that infringe copyrights or other rights, so long as we comply with the statutory
requirements of this act. Those of our businesses that mention or otherwise incorporate copyrighted material into the content they produce also
rely on fair use principles, which allow limited use of copyrighted materials without having to obtain the consent of the copyright holder,
provided we satisfy certain legal criteria. Also, the Children's Online Privacy Protection Act restrict the distribution of materials considered
harmful to children and impose additional restrictions on the ability of online services to collect information from minors. In the area of data
protection, many states have passed laws requiring notification to users when there is a security breach for personal data, such as California's
Information Practices Act. We face similar risks and costs as our products, services and content are offered in international markets and may be
subject to additional regulations.
Any failure on our part to comply with applicable laws may subject us to additional liabilities, which could adversely affect our business,
financial condition and results of operations. In addition, if the laws to which we are currently subject are amended or interpreted adversely to
our interests, or if new adverse laws are adopted, our products and services might need to be modified to comply with such laws, which would
increase our costs and could result in decreased demand for our products and services to the extent that we pass on such costs to consumers.
Specifically, in the case of tax laws, positions that we have taken or will take are subject to interpretation by the relevant taxing authorities and
while we believe that the positions we have taken to date comply with applicable law, there can be no assurances that the relevant taxing
authorities will not take a contrary position, and if so, that such positions will not adversely affect us. Any events of this nature could adversely
affect our business, financial condition and results of operations.
The processing, storage, use and disclosure of personal data could give rise to liabilities as a result of governmental regulation, conflicting
legal requirements or differing views of personal privacy rights.
We receive, transmit and store a large volume of personally identifiable information and other user data in connection with the processing
of search queries, the provision of online services, transactions with users and customers and advertising on our websites. The sharing, use,
disclosure and protection of this information are governed by the respective privacy and data security policies maintained by our various
businesses. Moreover, there are federal, state and international laws regarding privacy and the storing, sharing, use, disclosure and protection of
personally identifiable information and user data. Specifically, personally identifiable information is increasingly subject to legislation and
regulations in numerous jurisdictions around the world, the intent of which is to protect the privacy of personal information that is collected,
processed and transmitted in or from the governing jurisdiction.
There are currently pending several bills in the U.S. Congress, which if passed could result in more onerous requirements regarding the
manner in which certain personally identifiable information and other user data will need to be stored and managed. Additionally, the U.S.
Federal Trade Commission released a staff report in December 2010 in which it proposed a new framework for addressing commercial use of
consumer data. We could be adversely affected if legislation or regulations are expanded to require changes in the practices and/or privacy
policies of our various businesses, which
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