America Online 2014 Annual Report Download - page 39

Furthermore, many laws were adopted prior to the advent of the internet and related technologies or have an
unsettled application or scope with respect to the internet and related technologies and therefore their application
on our business is often uncertain. Additionally, as our business evolves, we may be subject to new laws and the
application of existing laws to us might change. These laws, regulations and principles 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, regulations or principles, we could receive negative publicity and be subject to significant
liabilities which could adversely affect our business.
In the United States, internet access services are generally classified as “information services” and, since
open internet rules promulgated in 2010 have been struck down by the DC Circuit Court of Appeals, are not
subject to regulation by the Federal Communications Commission (“FCC”). The FCC has voted to reclassify
internet access services as “telecommunications services” under Title II of the Telecommunications Act, which
will subject internet service providers (“ISPs”) to regulation that may restrict such providers from blocking or
discriminating against content, but we do not know whether the rules implemented as a result of this vote will be
adequate to prevent such conduct. Broadband providers have threatened litigation to challenge this action. In
addition, Congress is considering legislation that would impose open internet protection, but it is unclear when
Congress may take such action or whether that action will be successful. Currently the uncertainty of regulation
or legislation preventing broadband ISPs from blocking or discriminating against our content 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, we could receive negative publicity, incur significant penalties
or our business could be otherwise adversely affected.
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 as well as industry self-
regulatory principles are evolving and subject to potentially differing interpretations. There is a possibility that
these laws may be interpreted in a way that is inconsistent with our practices. In addition, various federal, state
and foreign legislative and regulatory bodies may expand current or enact new laws regarding data protection and
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, or could
result in us having to change our data collection practices, 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 cookies and a variety of other data correlation technologies for advertising and
measurement. Our data management platform is designed to be a comprehensive suite of advertising
technologies that will deploy tracking and data correlation technologies, the regulation of which could adversely
affect our business.
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