SOLOCAL_Registration Document_2017

RISK FACTORS 2.1 Risks Related to our Business and Strategy

If the use of “third-party cookies” is rejected by Internet users, or their collection is subject to restrictive legislation, our performance could suffer and we might lose customers and revenue. Cookies are used to gather data to help support some of our activities. These cookies are stored on the Internet user's device or browser when they browse the Internet to monitor their online activity. Cookies collect information, such as when an Internet user views an ad, clicks on an ad, or visits one of the Group’s websites. Cookies can easily be deleted or blocked by Internet users. Today, most browsers enable users to change their browser settings in order to restrict the installation of third party cookies and associated data collection. Internet users can also manually delete cookies or download "ad-blocker" software which prevents the cookies from being stored on their device. Moreover, the default settings of the Safari browser, developed by Apple, block cookies and other web browsers may well follow suit in the near future. Indeed, with the launch of IOS II, Apple has updated its browser to include an Intelligent Tracking Prevention (ITP) functionality, activated by default on its mobiles and computers. If our ability to install cookies on user devices is increasingly restricted by the aforementioned practices, we will no longer be able to collect as much data as is currently the case for targeted advertizing campaigns and other digital services provided on behalf of our customers. This may have a negative impact on our activities. In addition, there have been announcements that prominent advertizing platforms plan to replace cookies with alternative web tracking technologies. These alternative mechanisms have not been described in technical detail, and have not been announced with any specific stated timeline. It is possible that these companies would rely on proprietary algorithms or statistical methods to track web users without the deploying cookies, or would utilize log-in credentials entered by users into other web properties owned by these companies, to track web usage without deploying third-party cookies. Such companies may build alternative and potentially proprietary user tracking methods into their widely-used web browsers. If and to the extent that cookies are blocked or replaced by proprietary alternatives, our continued use of cookies may face negative consumer sentiment, reduce our market share, or otherwise place us at a competitive disadvantage. If cookies are replaced, in whole or in part, by proprietary alternatives, we may be obliged to license proprietary tracking mechanisms and data from companies that have developed them and that also compete with our business, and we may not be able to obtain such licenses on economically favorable terms. If such proprietary web-tracking standards are owned by companies that compete with us, they may be unwilling to make that technology available to us at all. In addition, in the EU, Directive 2002/58/EC (as amended by Directive 2009/136/EC), commonly referred to as the “Cookie Directive,” directs EU member states to ensure that storing or accessing information on an Internet user’s device, such as through a cookie, is allowed only if the Internet user has given

his or her consent. Some member states have adopted and implemented, this legislation that negatively impacts the use of cookies for digital advertizing. Some of these member states also require prior express user consent, as opposed to merely implied consent, to permit the placement and use of cookies. Where member states require prior express consent, our ability to deliver advertisements on certain websites or to certain users may be impaired. Furthermore, there are proposals to replace the current Cookie Directive with a new ePrivacy regulation, the effective date of direct application of which is as yet unconfirmed. If adopted, the ePrivacy regulation will standardize the currently disparate cookie consent laws across Europe. However, if adopted in its current draft form, it could create significant challenges for digital advertizing models as it introduces enhanced cookie consent and transparency requirements, in particular proposing that browser (and similar Internet access software) manufacturers should offer users the ability to accept or refuse cookies upon installation of their software. Restrictions on our ability to collect personal information may harm our business. We must abide by privacy protection laws, including European Directive No. 95/46/EC of 24 October 1995, which limits our ability to collect and use personal information about our users (see “ Regulation – Information Society Regulations – Protection of personal data” ). Any restrictions on using cookies or other trackers installed on an Internet user’s terminal or browser when the user looks up information on the Internet or the obligation to allow users to object to the use of these cookies, could weaken our ability to provide effective advertizing and other Digital Services as part of our business. An increased public awareness of privacy concerns and changes in the applicable rules created by, among other things, European regulations on the protection of personal data to which the Group must abide, could limit our ability to use such personal information for our business, and more generally affect the public perception of the Internet as a market for our goods and services. Each of these developments could have an impact on our business, financial condition and results of operations. In particular, the French Commission for Data Protection and Liberties (Commission nationale de l’informatique et des libertés, or CNIL) issued a public warning to PagesJaunes without financial penalty in September 2011 concerning a “Web Crawl” service aimed at enabling users to find a person not listed on the pagesblanches.fr directory by providing results obtained from social networks. The CNIL criticized PagesJaunes for distributing this data without specifically informing or having obtained authorization from the persons involved. PagesJaunes appealed this ruling with the Council of State (Conseil d’État), but this appeal was dismissed in March 2014. Among other things, the Council of State upheld CNIL’s position that physical persons whose data is collected indirectly, in particular on the Internet, must be informed at time of collection of the use that will be made of this data, irrespective of the difficulties that may be met in doing so. In the absence of prior notification given to such physical persons, we are not permitted to crawl personal data on the Internet.

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2017 Registration Document SOLOCAL