Vistaprint 2006 Annual Report Download - page 32

Table of Contents
the Supreme Court’s constitutional concerns and result in a reversal of its current position, we could be required to collect sales and use taxes
from purchasers. The imposition by state and local governments of various taxes upon Internet commerce could create administrative burdens for
us and could decrease our future net sales. A substantial amount of our business is derived from customers in the European Union, whose tax
environment is also complex and subject to changes that would be adverse to our business.
Our business is dependent on the Internet, and unfavorable changes in government regulation of the Internet and e−commerce could
substantially harm our business and results of operations.
Due to our dependence on the Internet for all of our sales, regulations and laws specifically governing the Internet and e−commerce may
have a greater impact on our operations than other more traditional businesses. Existing and future laws and regulations, including the taxation of
sales through the Internet, may impede the growth of e−commerce and our ability to compete with traditional graphic designers and printers, as
well as desktop printing products. These regulations and laws may cover taxation, as well as restrictions on imports and exports, customs, tariffs,
user privacy, data protection, pricing, content, copyrights, distribution, electronic contracts and other communications, consumer protection, the
provision of online payment services, broadband residential Internet access and the characteristics and quality of products and services. It is not
clear how existing laws governing issues such as property ownership, sales and other taxes, libel and personal privacy apply to the Internet and
e−commerce as the vast majority of these laws were adopted prior to the advent of the Internet and do not contemplate or address the unique
issues raised by the Internet or e−commerce. Those laws that do reference the Internet, such as the Bermuda Electronic Transactions Act 1999,
the U.S. Digital Millennium Copyright Act and the U.S. CAN−SPAM Act of 2003, are only beginning to be interpreted by the courts and their
applicability and reach are therefore uncertain. Those current and future laws and regulations or unfavorable resolution of these issues may
substantially harm our business and results of operations.
If we were required to review the content that a customer incorporates into a product and interdict the shipment of products that violate
copyright protections or other laws, our costs would significantly increase, which would harm our results of operations.
Because of our focus on automation and high volumes, our operations do not involve, for the vast majority of our sales, any human−based
review of content. Although our websites’ terms of use specifically require customers to represent that they have the right and authority to
reproduce a given content and that the content is in full compliance with all relevant laws and regulations, we do not have the ability to determine
the accuracy of these representations on a case−by−case basis. There is a risk that a customer may supply an image or other content that is the
property of another party used without permission, that infringes the copyright or trademark of another party, or that would be considered to be
defamatory, hateful, racist, scandalous, obscene, or otherwise offensive, objectionable or illegal under the laws or court decisions of the
jurisdiction where that customer lives. There is, therefore, a risk that customers may intentionally or inadvertently order and receive products from
us that are in violation of the rights of another party or a law or regulation of a particular jurisdiction. If we should become legally obligated in the
future to perform manual screening and review for all orders destined for a jurisdiction, we will encounter increased production costs or may cease
accepting orders for shipment to that jurisdiction which could substantially harm our business and results of operations.
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