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or more aggressively enforce existing rules, taxes, or restrictions,
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that could increase our expenses or prevent us from successfully
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commercializing these initiatives. If we do not realize the expected
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benefits of our investments, we may fail to grow and our business,
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results of operations, and financial condition would be materially
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adversely affected.
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*If we fail to comply with federal, state, and foreign laws relating to
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data privacy and data security, we may face potentially significant
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liability, negative publicity, an erosion of trust, and increased
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regulation and could materially adversely affect our business, results
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of operations, and financial condition.*
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Data privacy and data security laws, rules, and regulations are complex,
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and their interpretation is rapidly evolving, making implementation and
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enforcement, and thus compliance requirements, ambiguous, uncertain, and
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potentially inconsistent. Compliance with such laws may require changes
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to our data collection, use, transfer, disclosure, other processing, and
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certain other related business practices and may thereby increase
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compliance costs or have other material adverse effects on our business.
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As part of Host and guest registration and business processes, we
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collect and use personal data, such as names, dates of birth, email
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addresses, phone numbers, and identity verification information (for
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example, government issued identification or passport), as well as
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credit card or other financial information that Hosts and guests provide
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to us. The laws of many states and countries require businesses that
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maintain such personal data to implement reasonable measures to keep
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such information secure and otherwise restrict the ways in which such
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information can be collected and used.
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For example, the GDPR, which became effective on May 5, 2018, has
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resulted and will continue to result in significantly greater compliance
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burdens and costs for companies like ours. The GDPR regulates our
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collection, control, processing, sharing, disclosure, and other use of
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data that can directly or indirectly identify a living individual
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("ersonal data", and imposes stringent data protection requirements with
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significant penalties, and the risk of civil litigation, for
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noncompliance.
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Failure to comply with the GDPR may result in fines of up to 20 illion
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Euros or up to 4% of the annual global revenue of the infringer,
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whichever is greater. It may also lead to civil litigation, with the
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risks of damages or injunctive relief, or regulatory orders adversely
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impacting the ways in which our business can use personal data. Many
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large geographies in which we operate, including Australia, Brazil,
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Canada, China, and India, have passed or are in the process of passing
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comparable or other robust data privacy and security legislation or
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regulation, which may lead to additional costs and increase our overall
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risk exposure.
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In addition, from January 1, 2021 (when the transitional period
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following Brexit expired), we are also subject to the GDPR, which,
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together with the amended UK Data Protection Act of 2018, retains the
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GDPR in UK national law. Both regimes have the ability to fine up to the
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greater of 20 illion Euros (17 million British Pounds) or 4% of global
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turnover, respectively. The UK framework may in the future start to
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diverge from the EU framework, and these changes may lead to additional
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costs and increase our overall risk exposure.
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Additionally, we are subject to laws, rules, and regulations regarding
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cross-border transfers of personal data, including laws relating to
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transfer of personal data outside the European Economic Area ("EA".
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Recent legal developments in Europe have created complexity and
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uncertainty regarding transfers of personal data from the EEA and United
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Kingdom to the United States and other jurisdictions. On July 6, 2020,
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the CJEU invalidated the EU-US Privacy Shield Framework ("rivacy Shield"
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under which personal data could be transferred from the EEA to US
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entities that had self-certified under the Privacy Shield scheme. While
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the CJEU upheld the adequacy of the standard contractual clauses (a
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standard form of contract approved by the European Commission as an
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adequate personal data transfer mechanism, and potential alternative to
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the Privacy Shield), it noted that reliance on them alone may not
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necessarily be sufficient in all circumstances; this has created
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uncertainty and increased the risk around our international operations.
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Following the CJEU' ruling, there has been increased regulatory action
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in this area and several decisions by EU Data Protection Authorities
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that transfer to the United States, including transfer to well-known
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U.S. service providers, are unlawful. As the enforcement landscape
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further develops, and supervisory authorities issue further decisions
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and guidance on personal data export mechanisms, including circumstances
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where the standard contractual clauses cannot be used or if our use of
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certain products and vendors is the subject of investigation, we could
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suffer additional costs, complaints, or fines, have to stop using
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certain tools and vendors and make other operational changes, and/or if
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we are otherwise unable to transfer personal data between and among
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countries and regions in which we operate, it could affect the manner in
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which we provide our services, the geographical location or segregation
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of our relevant systems and operations, and could materially adversely
|
affect our business, results of operations and financial condition.
|
In addition to other mechanisms (particularly standard contractual
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clauses), we previously relied on our own Privacy Shield certification
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and, in limited instances, the Privacy Shield certifications of third
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parties (for example, vendors and partners) for the purposes of
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transferring personal data from the EEA and United Kingdom to the United
|
States. We continue to rely on the standard contractual clauses to
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transfer personal data outside the EEA and United Kingdom, including to
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the United States. Additionally, in certain circumstances, we rely on
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derogations provided for by law. These recent developments may require
|
us to review and amend the legal mechanisms by which we make and/ or
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