Sony 2015 Annual Report Download - page 20

impact from such attacks, can provide absolute security against compromise. As a result, Sony’s business
information, including proprietary information, intellectual property, and employee information, and data related
to customers, suppliers, and other business partners, may be lost, destroyed, disclosed, misappropriated, altered,
or accessed without consent, and Sony’s information technology systems, or those of its service providers or
other business partners, may be disrupted. Malicious third parties may also use unauthorized access to Sony’s
networks as a platform to access the networks and thereby the information of Sony’s third-party business partners
without Sony’s knowledge. Sony has previously been the subject of sophisticated and targeted attacks. For
example, in the fiscal year ended March 31, 2015, Sony’s Pictures segment was subject to a cyber-attack that
resulted in unauthorized access to, and theft and disclosure of Sony business information, including employee
information and other information, and the destruction of data. In addition, Sony’s network services, online game
businesses and websites of certain subsidiaries have been subject to cyber-attacks by groups and individuals with
a range of motives and expertise, resulting, in some instances, in unauthorized access to, the potential or actual
theft of, and/or disclosure of customer information.
In addition, even if such data is not stored on a network, and regardless of where or in what form such data
is stored, Sony’s business information and other data owned or maintained by or on behalf of Sony may be
compromised by malicious third parties, or man-made or natural events, or impacted by intentional or inadvertent
actions or inactions of Sony employees, or those of a third-party service provider, through loss, destruction,
disclosure, misappropriation, alteration or unauthorized access to such data.
Further, the confidentiality, integrity and availability of products and services, including networked products
and online services, provided by Sony or its service providers or business partners may be compromised by
malicious third parties or man-made or natural events, or impacted by intentional or inadvertent actions or
inactions by Sony employees, or those of a third-party service provider or business partner. For example, Sony’s
online services and websites have been subjected to denial-of-service and other attacks by technically
sophisticated and well-resourced third parties and others.
Any loss, destruction, disclosure, misappropriation or alteration of or unauthorized access to data owned or
maintained by or on behalf of Sony, or other breach of Sony’s information security, whether or not the result of a
cyber-attack, including disruption to its products and services, can result in significant remediation costs,
including repairing system damage, engaging third-party experts, deploying additional personnel, training
employees, and compensation or incentives offered to third parties whose data has been compromised. In
addition, a disruption to Sony’s networks and online services may seriously disrupt the businesses that rely on
these networks and online services for their operations, resulting in lost revenues, damage to relationships with
business partners and other third parties, and the failure to retain or attract customers. Breaches of information
security, whether or not involving a cyber-attack, may lead to lost revenues resulting from a loss in competitive
advantage due to the unauthorized disclosure, alteration, destruction or use of proprietary information, including
intellectual property, the failure to retain or attract customers, the disruption of critical business processes or
information technology systems, and the diversion of management’s attention and resources. Moreover, such
disruptions and breaches may result in adverse media coverage, which may harm Sony’s brand image and
reputation. Sony may also be subject to legal claims or legal proceedings, including regulatory investigations and
actions, and the attendant legal fees, as well as potential settlements, judgments and fines. Sony’s cyber insurance
may not cover all expenses and losses and, accordingly, cyber-attacks may have an adverse impact on Sony’s
operating results and financial condition. Even without actual breaches of information security, protection against
increasingly sophisticated and prevalent cyber-attacks may result in significant future prevention, detection,
response and management costs, or other costs, including the deployment of additional cyber-security
technologies, engaging third-party experts, deploying additional personnel, and training employees. Such
expenses may also have an adverse impact on Sony’s operating results and financial condition.
Sony’s business may suffer as a result of adverse outcomes of current or future litigation and regulatory
actions.
Sony faces the risk of litigation and regulatory proceedings in different countries in connection with its
operations. Legal proceedings, including regulatory actions, may seek to recover very large indeterminate
amounts or to limit Sony’s operations, and the possibility that they may arise and their magnitude may remain
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