America Online 2011 Annual Report Download - page 26

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other events, could lead to negative publicity, harm to our reputation, customer dissatisfaction, regulatory enforcement actions or individual or class-action
lawsuits or significant expenditures to recover the data or protect data from similar releases in the future, and may otherwise adversely affect our business.
Furthermore, as not all of our systems are fully redundant, some data or systems might not be recoverable in a catastrophic event or other significant service
disruption.
Changes to federal, state or international laws or regulations applicable to our business could adversely affect our business.
Our business is subject to a variety of federal, state and international laws and regulations, including those with respect to privacy, advertising
generally, consumer protection, content regulation, intellectual property, defamation, child protection, advertising to and collecting information from children,
taxation, employment classification and billing. These laws and regulations and the interpretation or application of these laws and regulations could change. In
addition, new laws or regulations affecting our business could be enacted. These laws and regulations are frequently costly to comply with and may divert a
significant portion of management's attention. If we fail to comply with these applicable laws or regulations, we could be subject to significant liabilities
which could adversely affect our business.
There are many federal, state and international laws that may affect our business including measures to regulate consumer privacy, the use of
copyrighted material, the collection of certain data, network neutrality, patent litigation, cyber security, child protection, subpoena and warrant processes,
employee classification and others.
In addition, most states have enacted legislation governing the breach of data security in which sensitive consumer information is released or accessed.
If we fail to comply with these applicable laws or regulations we could be subject to significant liabilities which could adversely affect our business.
Many of our advertising partners are subject to industry specific laws and regulations or licensing requirements, including advertisers in the following
industries: pharmaceuticals, online gaming, alcohol, adult content, tobacco, firearms, insurance, securities brokerage, real estate, sweepstakes, free trial offers,
automatic renewal services and legal services. If any of our advertising partners fails to comply with any of these licensing requirements or other applicable
laws or regulations, or if such laws and regulations or licensing requirements become more stringent or are otherwise expanded, our business could be
adversely affected. Furthermore, these laws may also limit the way we advertise our products and services or cause us to incur compliance costs, which could
affect our revenues and could further adversely impact our business.
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.
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