Yahoo 2014 Annual Report Download - page 30

our international operations could result in damage awards, fines, criminal actions, sanctions, or
penalties against us, our officers or our employees, prohibitions on the conduct of our business and
our ability to offer products and services, and damage to our reputation. Although we have
implemented policies and procedures designed to promote compliance with these laws, there can be
no assurance that our employees, contractors, or agents will not violate our policies. These risks
inherent in our international operations and expansion increase our costs of doing business
internationally and could result in harm to our business, operating results, and financial condition.
We may be subject to legal liability associated with providing online services or content.
We host and provide a wide variety of services and technology products that enable and encourage
individuals and businesses to exchange information; upload or otherwise generate photos, videos,
text, and other content; advertise products and services; conduct business; and engage in various
online activities both domestically and internationally. The law relating to the liability of providers of
online services and products for activities of their users is currently unsettled both within the U.S. and
internationally. As a publisher and producer of original content, we may be subject to claims such as
copyright, libel, defamation or improper use of publicity rights, as well as other infringement claims
such as plagiarism. Claims have been threatened and brought against us for defamation, negligence,
breaches of contract, plagiarism, copyright and trademark infringement, unfair competition, unlawful
activity, tort, including personal injury, fraud, or other theories based on the nature and content of
information which we publish or to which we provide links or that may be posted online or generated
by us or by third parties, including our users. In addition, we have been and may again in the future
be subject to domestic or international actions alleging that certain content we have generated or
third-party content that we have made available within our services violates laws in domestic and
international jurisdictions. We arrange for the distribution of third-party advertisements to third-party
publishers and advertising networks, and we offer third-party products, services, or content, such as
stock quotes and trading information, under the Yahoo brand or via distribution on Yahoo Properties.
We may be subject to claims concerning these products, services, or content by virtue of our
involvement in marketing, branding, broadcasting, or providing access to them, even if we do not
ourselves host, operate, provide, or provide access to these products, services, or content. While our
agreements with respect to these products, services, and content may provide that we will be
indemnified against such liabilities, the ability to receive such indemnification may be disputed, could
result in substantial costs to enforce or defend, and depends on the financial resources of the other
party to the agreement, and any amounts received might not be adequate to cover our liabilities or
the costs associated with defense of such proceedings. Defense of any such actions could be costly
and involve significant time and attention of our management and other resources, may result in
monetary liabilities or penalties, and may require us to change our business in an adverse manner.
It is also possible that if any information provided directly by us contains errors or is otherwise
wrongfully provided to users, third parties could make claims against us. For example, we offer Web-
based e-mail services, which expose us to potential risks, such as liabilities or claims, by our users and
third parties, resulting from unsolicited e-mail, lost or misdirected messages, illegal or fraudulent use
of e-mail, alleged violations of policies, property interests, or privacy protections, including civil or
criminal laws, or interruptions or delays in e-mail service. We may also face purported consumer class
actions or state actions relating to our online services, including our fee-based services (particularly
in connection with any decision to discontinue a fee-based service). In addition, our customers, third
parties, or government entities may assert claims or actions against us if our online services or
technologies are used to spread or facilitate malicious or harmful code or applications.
Investigating and defending these types of claims are expensive, even if the claims are without merit
or do not ultimately result in liability, and could subject us to significant monetary liability or cause a
change in business practices that could negatively impact our ability to compete.
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