America Online 2010 Annual Report Download - page 28

Table of Contents
Failure to comply with federal, state or international privacy laws or regulations, or the expansion of current or the enactment of new privacy laws or
regulations, could adversely affect our business.
A variety of federal, state and international laws and regulations govern the collection, use, retention, sharing and security of consumer data. In addition
to the potentially differing interpretations of existing law, the present landscape of public policy and privacy creates uncertainty for business planning. In such
an uncertain environment, it is difficult to make informed long-term business planning decisions about data use, notice, storage, access, retention or choice.
The existing privacy-related laws and regulations are evolving and subject to potentially differing interpretations. In addition, various federal, state and
foreign legislative and regulatory bodies may expand current or enact new laws regarding privacy matters. We have posted privacy policies and practices
concerning the collection, use and disclosure of user data on our websites. Any failure, or perceived failure, by us to comply with our posted privacy policies
or with any data-related consent orders, Federal Trade Commission requirements or orders or other federal, state or international privacy or consumer
protection-related laws, regulations or industry self-regulatory principles could result in claims, proceedings or actions against us by governmental entities or
others or other liabilities, which could adversely affect our business. In addition, a failure or perceived failure to comply with industry standards or with our
own privacy policies and procedures could result in a loss of consumers or advertisers and adversely affect our business.
Federal, state and international governmental authorities continue to evaluate the privacy implications inherent in the use of third-party web "cookies"
for behavioral advertising. We use cookies, which are small text files placed in a consumer's browser, to facilitate authentication, preference management,
research and measurement, personalization and advertisement and content delivery. In the Third Party Network, cookies or similar technologies help present,
target and measure the effectiveness of advertisements. The regulation of these "cookies" and other current online advertising practices could adversely affect
our business.
AOL operates in an environment of high scrutiny and regulatory uncertainty: The use of consumer data by online service providers and advertising
networks is a topic of active interest among a number of regulatory bodies at the national and state levels and the regulatory environment is unsettled.
The disposition of our ICQ operations may be affected by the review of the transaction by the Committee on Foreign Investment in the United States.
After our disposition of our ICQ operations ("ICQ") in July 2010, the Committee on Foreign Investment in the United States ("CFIUS") contacted
Mail.ru (formerly known as Digital Sky Technologies Limited) and, subsequently, Mail.ru and AOL submitted a joint voluntary filing to CFIUS commencing
a review of the transaction under Section 721 of Title VII of the Defense Production Act of 1950, as amended.
AOL and Mail.ru are currently working with CFIUS to address their concerns. However, we can provide no assurance regarding the resolution of the
CFIUS process, including that AOL and Mail.ru will be able to mutually resolve CFIUS' concerns. If AOL and Mail.ru are unable to resolve CFIUS'
concerns, CFIUS may impose mitigation measures or refer the matter to the President, who has authority to impose a broad range of remedies, which may
include, among other things, unwinding the transaction or divesting ICQ by Mail.ru. We can provide no assurance that CFIUS will not impose conditions on
our disposition of ICQ that materially increase our estimated costs or that materially increase or extend our anticipated involvement in the operations of ICQ,
or that the transaction will not be unwound or materially restructured in excess of our expectations. For additional information regarding the disposition of our
ICQ operations see "Note 4" in our accompanying consolidated financial statements.
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