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The adoption and enforcement of legislation that restricts the marketing, content, business model, or sales of our
products in countries in which we do business may harm the sales of our products, as the products we are able to offer to our
customers and the size of the potential audience for our products may be limited. We may be required to modify certain
product development processes or products or alter our marketing strategies to comply with regulations, which could be
costly or delay the release of our products. In addition, the laws and regulations affecting our products vary by territory and
may be inconsistent with one another, imposing conflicting or uncertain restrictions. Failure to comply with any applicable
legislation may also result in government-imposed fines or other penalties, as well as harm to our reputation. Because the
King Acquisition significantly increased our user population, we are subject us to laws and regulations in additional
jurisdictions, which may exacerbate the potential adverse impact on our business.
Change in government regulations relating to the Internet could negatively impact our business.
We rely on our consumers’ access to significant levels of Internet bandwidth for the sale and digital delivery of our
content and the functionality of our games with online features. Changes in laws or regulations that adversely affect the
growth, popularity or use of the Internet, including laws impacting “net neutrality,” could impair our consumers’ online video
game experiences, decrease the demand for our products and services or increase our cost of doing business. Although certain
jurisdictions have implemented laws and regulations intended to prevent Internet service providers from discriminating
against particular types of legal traffic on their networks, other jurisdictions may lack such laws and regulations or repeal
existing laws or regulations. For example, in December 2017, the Federal Communications Commission voted to repeal net
neutrality regulations in the U.S. and, following that decision, several states enacted net neutrality regulations. Given
uncertainty around these rules relating to the Internet, including changing interpretations, amendments, or repeal of those
rules, coupled with the potentially significant political and economic power of local Internet service providers and the
relatively significant level of Internet bandwidth access our products and services require, we could experience
discriminatory or anti-competitive practices that could impede our growth, cause us to incur additional expenses, or otherwise
negatively impact our business.
The laws and regulations concerning data privacy are continually evolving. Failure to comply with these laws and
regulations could harm our business.
Consumers play certain of our games online using our own distribution platforms, including Blizzard Battle.net,
third-party platforms and networks, through online social platforms, and on mobile devices. We collect and store information
about our consumers, including consumers who play these games. In addition, we collect and store information about our
employees. We are subject to laws from a variety of jurisdictions regarding privacy and the protection of this information,
including the E.U.’s General Data Protection Regulation (the “GDPR”), the U.S. Children’s Online Privacy Protection Act
(“COPPA”), which regulates the collection, use, and disclosure of personal information from children under 13 years of age,
and the California Consumer Privacy Act. Failure to comply with any of these laws or regulations may increase our costs,
subject us to expensive and distracting government investigations, and result in substantial fines.
Data privacy protection laws are rapidly changing and likely will continue to do so for the foreseeable future and
may be inconsistent from jurisdiction to jurisdiction. For example, the E.U. has traditionally taken a broader view than the
United States and certain other jurisdictions as to what is considered personal information and has imposed greater
obligations under data privacy and protection regulations, including those imposed under the GDPR. The U.S. government,
including the Federal Trade Commission and the Department of Commerce, as well as various U.S. state governments, are
continuing to review the need for greater regulation over the collection of personal information and information about
consumer behavior on the Internet and on mobile devices. Complying with emerging and changing laws could require us to
incur substantial costs or impact our approach to operating and marketing our games. Due to the rapidly changing nature of
these data privacy protection laws, there is not always clear guidance from the respective governments and regulators
regarding the interpretation of the law, which may create the risk of an inadvertent violation. For example, the California
legislature recently passed the California Consumer Privacy Act and the E.U. has proposed further reforms to its existing data
protection legal framework, in addition to the GDPR, which may further change our compliance obligations. Various
government and consumer agencies worldwide have also called for new regulation and changes in industry practices. In
addition, in some cases, we are dependent upon our platform providers and external data processors to assist us in ensuring
compliance with these various types of regulations, and a violation by one of these third parties may also subject us to
government investigations and result in substantial fines.
Player interaction with our games is subject to our privacy policies, end user license agreements (“EULAs”), and
terms of service. If we fail to comply with our posted privacy policies, EULAs, or terms of service, or if we fail to comply
with existing privacy-related or data protection laws and regulations, it could result in proceedings or litigation against us by
governmental authorities or others, which could result in fines or judgments against us, damage our reputation, impact our
financial condition, and harm our business. If regulators, the media, consumers, or employees raise any concerns about our
privacy and data protection or consumer protection practices, even if unfounded, this could also result in fines or judgments
against us, damage our reputation, negatively impact our financial condition, or damage our business.