Yahoo 2009 Annual Report Download - page 23

third-party rights such as publicity and privacy rights, we could incur substantial monetary liability, be required
to enter into costly royalty or licensing agreements or be prevented from using such rights, which could require
us to change our business practices in the future and limit our ability to compete effectively. We may also incur
substantial expenses in defending against third-party infringement claims regardless of the merit of such claims.
In addition, many of our agreements with our customers or Affiliates require us to indemnify them for some
types of third-party intellectual property infringement claims, which could increase our costs in defending such
claims and our damages. The occurrence of any of these results could harm our brand and negatively impact our
operating results.
We are subject to U.S. and foreign government regulation of Internet, mobile, and voice over internet
protocol, or VOIP, products and services which could subject us to claims, judgments, and remedies including
monetary liabilities and limitations on our business practices.
We are subject to regulations and laws directly applicable to providers of Internet, mobile, and VOIP services both
domestically and internationally. The application of existing domestic and international laws and regulations to
Yahoo! relating to issues such as user privacy and data protection, defamation, pricing, advertising, taxation,
gambling, sweepstakes, promotions, billing, real estate, consumer protection, accessibility, content regulation,
quality of services, telecommunications, mobile, television, and intellectual property ownership and infringement in
many instances is unclear or unsettled. In addition, we will also be subject to any new laws and regulations directly
applicable to our domestic and international activities. Further, the application of existing laws to Yahoo! or our
subsidiaries regulating or requiring licenses for certain businesses of our advertisers including, for example,
distribution of pharmaceuticals, alcohol, adult content, tobacco, or firearms, as well as insurance and securities
brokerage, and legal services, can be unclear. Internationally, we may also be subject to laws regulating our
activities in foreign countries and to foreign laws and regulations that are inconsistent from country to country. We
may incur substantial liabilities for expenses necessary to defend such litigation or to comply with these laws and
regulations, as well as potential substantial penalties for any failure to comply. Compliance with these laws and
regulations may also cause us to change or limit our business practices in a manner adverse to our business.
A number of U.S. federal laws, including those referenced below, impact our business. The Digital Millennium
Copyright Act (“DMCA”) is intended, in part, to limit the liability of eligible online service providers for listing
or linking to third-party Websites that include materials that infringe copyrights or other rights of others. Portions
of the Communications Decency Act (“CDA”) are intended to provide statutory protections to online service
providers who distribute third-party content. Yahoo! relies on the protections provided by both the DMCA and
CDA in conducting its business. Any changes in these laws or judicial interpretations narrowing their protections,
or international jurisdictions’ refusal to apply similar provisions to foreign lawsuits, will subject us to greater risk
of liability and may increase our costs of compliance with these regulations or limit our ability to operate certain
lines of business. The Children’s Online Privacy Protection Act is intended to impose restrictions on the ability
of online services to collect some types of information from children under the age of 13. In addition, Providing
Resources, Officers, and Technology to Eradicate Cyber Threats to Our Children Act of 2008 (“PROTECT Act”)
requires online service providers to report evidence of violations of federal child pornography laws under certain
circumstances. Other federal and state laws and legislative efforts designed to protect children on the Internet
may impose additional requirements on the Company. U.S. export control laws and regulations impose
requirements and restrictions on exports to certain nations and persons and on our business. The cost of
compliance with these regulations may increase in the future as a result of changes in the regulations or the
interpretation of them. Further, any failure on our part to comply with these regulations may subject us to
significant liabilities.
Changes in regulations or user concerns regarding privacy and protection of user data, or any failure to
comply with such laws, could adversely affect our business.
Federal, state and international laws and regulations govern the collection, use, retention, sharing and security of
data that we receive from and about our users. We have posted on our and many of our Affiliates’ Websites our
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