SOLOCAL_Registration Document_2017

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RISK FACTORS 2.1 Risks Related to our Business and Strategy

We rely on assumptions and estimates to calculate certain of our key indicators, and inaccuracies may harm our reputation and negatively affect our business. Certain key indicators, such as the number of our unique visitors, number of visits and audience, are calculated, in some cases, using Internal company data and, in other cases, relying on data from third parties. While these numbers are based on what we believe to be reasonable calculations, it is difficult to measure usage and user commitment. For example, a single person or user may have multiple accounts or browse the Internet on multiple browsers, or some mobile applications automatically contact our servers for regular updates with no user action and we are not able to capture user information on all of our platforms. As such, the calculations of our unique visitors, number of visits, or audience may not accurately reflect the number of people actually using our platforms. These figures may vary from estimates published by third parties or similar indicators provided by Group competitors insofar as the methodologies used by the Group and by third parties from which the Group obtains this data are different. Although we regularly review and adjust our methodologies for calculating internal indicators to improve their accuracy, if our users, clients, partners and other stakeholders do not perceive our indicators to be accurate representations or if we discover significant inaccuracies in our user indicators, our reputation may be affected. Our success depends on our executive officers, management, and other key personnel, and failure to retain or attract such qualified personnel could harm the business. The success of our business notably depends on upon the experience and expertise of our key personnel. Competition for this talent in the digital services market is intense, and we may not be able to retain and attract a sufficient number of qualified personnel in the future, which could prevent the successful execution of our strategy and have a material adverse effect on our financial condition and results of operations. We may make investments or divestitures, which may have an adverse effect on our business. We have divested certain of our businesses, including AVendreALouer.fr and Chronoresto in 2017, and we may choose to further divest, sell or close down other businesses in the future. No assurance can be given that we could find potential buyers for one of our businesses or that the price received from the sale of these businesses or the cost reductions associated with their disposal or closing could offset any resulting decrease in our results of operations.

In May 2016 a new regulation on the Protection of Personal Data (Regulation 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, General Data Protection Regulation, the (“ GDPR ”), came into force and instigated a two-year preparatory period during which we will need to adopt new data processing requirements. The GDPR will apply in all EU member states from 25 May 2018. We process consumer personal data and client personal data as part of our business, we must therefore comply with the GDPR. Fines for serious infringements of the GDPR may rise to the highest of (i) 4% of the annual worldwide turnover of the Group or (ii) €20 million. In addition, the GDPR imposes new data breach notification requirements, such as the duty to notify the relevant supervisory authority of a data breach within 72 hours of becoming aware of the breach. The GDPR will also impose additional obligations on the Group to be able to respond to the new rights of persons affected by data, including for example, the rights to erasure and data portability. Each of these new obligations may result in increased costs of compliance and implementation of necessary technical systems. We continuously verify our compliance with applicable legislation on the protection of privacy. With this in mind, we have created a Personal Data department and a Data Protection (CIL) Correspondent. However, we cannot eliminate all risks that may result from overlooking or misinterpreting applicable legislation on the protection of privacy, which could negatively impact our business, financial condition and results and operations. If Internet search engines’ methodologies are modified or our search result page rankings decline for other reasons, our audiences and client numbers could decline. We depend on Internet search engines, such as Google and Bing, to direct a significant amount of traffic to our websites. Our ability to maintain the number of visitors directed to our websites is not entirely within our control, and it may take several months or longer to respond to or remedy any such changes in traffic. Our competitors’ search engine optimization (SEO) efforts may result in their websites receiving a higher search result page ranking than ours, or Internet search engines could review their methodologies in an attempt to improve their search results, which could adversely affect the placement of our search result page ranking. If search engines modify their search algorithms in ways that are detrimental to our growth or in ways that may make it harder for visitors to use our websites, or if our competitors’ SEO efforts are more successful than ours, overall growth in our online traffic could slow, user engagement could decrease, and we could lose clients.

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2017 Registration Document SOLOCAL