India’s most recent General Elections finished in early June 2024, with a respectable 66% of its billion strong electorate exercising their franchise. Results saw the ruling dispensation returning to power, but with a lower number of seats; importantly, this lost them their ‘single party majority’, and the new Government is a coalition with regional allies. This fact influences also expectations about digital regulations and reforms that can be pushed through in the next 5 years. Over the past decade, Indian leaders have been able to push through major economic regulations such as the Good and Services Tax Act, 2016, or the Insolvency Code, 2016, as well as digital sector regulations such as the Digital Personal Data Protection Act, 2023. The current Government may find legislating a little more difficult, given its new political realities.
One particular area of interest is the implementation of India’s new personal data privacy law. There remain a number of ambiguities gaps in the law that was passed in August 2023. This article take a look at the current status of the new data law, and also examines 3 areas in which the Indian Government will have to come up with solutions for vexing data privacy problems.
New Data Protection Law’s Implementation Imminent
The Digital Personal Data Protection Act, 2023 (DPDP) was notified by the Government of India in August 2023, and is awaiting implementation. The DPDP applies to processing of all types of personal data that is in digital form (or non-digital form and digitized subsequently), within the territory of India, or outside the territory of India if it is in connection with activities related to goods and services within the territory of India. The law also sets out the obligations of entities handling and processing data as well as the rights of individuals. It proposes a maximum penalty of Rs 250 crore (about USD 300 million) and a minimum of Rs 50 crore (about USD 60 million) on entities violating these rules.
The Government has proposed to set up a new regulator, the data protection board (DPB), that can prescribe rules, impose penalties, summon data fiduciaries, inspect the books and accounts or statements and even recommend to the government which intermediaries need to be blocked basis violation of the provisions of the Act. The government is presently formulating rules under the DPDP, they are most likely to be issued for public consultation in the coming months of 2024 with implementation underway by the end of the current FY.
‘3 Conundrums’ in the India Data Protection Act
How to Prevent ‘Consent Fatigue’?
Under the new DPDP, prior to processing personal data ‘Data Fiduciaries’ are required to request consent from every individual ‘Data Principal’. Every request must be accompanied with a notice informing the Data Principal of the purpose of seeking the data, the manner in which the latter can exercise their rights and the procedure for making complaints. The notice acts as a gateway for informed, specific, and clearly unambiguous consent, such that Data Principals are aware of their rights under the Act. In addition, once the law has come into force, Data Fiduciaries are supposed to inform Data Principals of what ‘historical’ data they hold, the Data Principals rights in respect thereof, etc.
While a welcome move, fielding multiple requests for consent for processing of their data could lead to consent fatigue. The reader will remember how GDPR’s implementation in 2018 led to a barrage of privacy notices over email and checkboxes on websites. The new DPDP, too, could see businesses asking their Indian customers for consent multiple times, and over multiple channels. India already struggles with an epidemic of spam and unsolicited commercial calls and messages; adding more touchpoints under the new privacy law will not help matters. The balance between consumer protection via informed consent, and public nuisance from commercial communications, will be a difficult one to achieve.
How will Age-Gating Work?
Under current Indian privacy laws (contained in the Information Technology (Reasonable Security Practices And Procedures) Rules, 2011), as also under prospective laws (the DPDP), personal data can be collected only with consent. The type and nature of consent differ (slightly) between the new and old regimes, but the requirement to collect and process personal data only with prior consent is carried through. In our experience under current laws, consent is typically obtained by way of a click-through, or an “I Accept” button in respect of privacy policies/terms. Note that there are no ‘legitimate purpose’ type exceptions under current Indian privacy laws; including on account of performance of a contract.
Of course, consent of children cannot be collected by the same meanes for various reasons; not least, that minors under 18 years of age cannot legally contract under Indian laws. For this reason, Section 9 of the DPDP notes that “before processing any personal data of a child” a data fiduciary has to “obtain verifiable consent of the parent of such child or the lawful guardian, as the case may be, in such manner as may be prescribed” (emphasis supplied).
Age-gating is a thorny technical issue that is still awaiting the right solution – be it mandatory parental consent, biometrics, facial and search-history recognition algorithms, or other technical methods. Each of these methods have their drawbacks, whether in terms of cost, scalability for a market like India (where ‘children’ will number in the hundreds of millions!), and even privacy concerns around tracking children using online means. Similarly, establishing a national database of children’s’ information that can be used for authentication comes with fairly obvious drawbacks.
What does a Consent Manager really Do?
In introducing the concept of a ‘Consent Manager’, the DPDP has delved into an area that has not been explored thus far. Under Section 6 (7) through (9) of the DPDP, a Consent Manager is denoted as an intermediary through whom a data principal can give, manage, review, or withdraw her consent. The Consent Manager is proposed to be regulated by the Government (through the DPB), under rules that are yet to be issued.
In theory, at least, this novel entity may streamline the process of consent management for both Data Principals and Data Fiduciaries. However, at this point, there is little clarity on how this would work in practice, in part due to the fact that this concept is a novel one. A user-driven Content Manager will essentially need to work as a collective, and it is difficult to predict how it will handle the multiple online channels that consent is required in. At worst, this may become a bottleneck for users to access the Internet, as opposed to providing them with a better online experience.
A Cross Sectoral Approach Is Needed
Though lacking specific provisions for inter-regulatory coordination, the DPDP prompts a voluntary effort for collaborative dialogue among governmental bodies and sectoral regulators. Major sectoral regulators, such as the Reserve Bank and the Central Consumer Protection Authority, should actively consult the industry and each other to understand their challenges in implementing the Act, while upholding the mandate of sector-specific regulations. A proactive approach to streamline existing laws with the DPDPA can mitigate inadvertent conflicts and foster a conducive business environment, while keeping data protection at the centre of it.
Since most of the legal and regulatory development in data privacy is recent, the Government, industry and stakeholders are continuously attempting to understand the new developments and capacity-building attempts required to ensure compliance. Courts in India have been pushing the Indian Government to accelerate the new data law. Significant litigations on the privacy and Government surveillance are yet to be concluded, and it would be interesting to see how the new law impacts these.
The next few months of 2024 will see a number of subordinate rules and regulations under the DPDP being formulated, and specified portions of the DPDP will be made operational in phases. It would be interesting to see how and when the age-gating, etc., related provisions of the DPDP are brought into effect, and what mechanisms are put in place to ensure compliance. The new Indian Government has a task at its hand in figuring out the answers to these and other issues.
Article provided by INPLP members: Vikram Jeet Singh and Prashant Mara (BTG Advaya, India)
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