Digital Personal Data Protection Bill

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Context

• Indian government plans to amend draft provisions on data transfers in the proposed Digital Personal Data Protection Bill.

Background

The Bill

• The purpose of this Act is to provide for the processing of digital personal data in a manner that recognizes both the right of individuals to protect their personal data and the need to process personal data for lawful purposes.
• The Bill will establish the comprehensive legal framework governing digital personal data protection in India.

Data Bill based on seven principles

According to an explanatory note for the bill, it is based on seven principles.

• Usage of personal data by organisations must be done in a manner that is lawful, fair to the individuals concerned and transparent to individuals.
• Personal data must only be used for the purposes for which it was collected.
• This third principle talks of data minimisation while the fourth puts an emphasis on data accuracy when it comes to collection.
• Personal data that is collected cannot be “stored perpetually by default,” and storage should be limited to a fixed duration.
• There should be reasonable safeguards to ensure there is “no unauthorised collection or processing of personal data.”
• The person who decides the purpose and means of the processing of personal data should be accountable for such processing.

Data Principal and Data Fiduciary

• The bill uses the term “Data Principal” to denote the individual whose data is being collected.
• The term “Data Fiduciary” the entity (can be an individual, company, firm, state etc), which decides the “purpose and means of the processing of an individual’s personal data.”
• The law also makes a recognition that in the case of children –defined as all users under the age of 18— their parents or lawful guardians will be considered their ‘Data Principals.’
• Under the law, personal data is “any data by which or in relation to which an individual can be identified.” Processing means “the entire cycle of operations that can be carried out in respect of personal data.” So right from collection to storage of data would come under processing of data as per the bill.
• The bill also ensures that individuals should be able to “access basic information” in languages specified in the eighth schedule of the Indian Constitution.
• The bill also makes it clear that individual needs to give consent before their data is processed and that “every individual should know what items of personal data a Data Fiduciary wants to collect and the purpose of such collection and further processing.”
• Further, the notice of data collection needs to be in clear and easy-to-understand language. Individuals also have the right to withdraw consent from a Data Fiduciary.

Significant Data Fiduciaries

• The bill also talks of ‘Significant Data Fiduciaries, who deal with a high volume of personal data. The Central government will define who is designated under this category based on a number of factors ranging from the volume of personal data processed to the risk of harm to the potential impact on the sovereignty and integrity of India. This category needs to fulfil certain additional obligations to enable greater scrutiny of its practices.
• Such entities will have to appoint a ‘Data protection officer’ who will represent them. They will be the point of contact for grievance redressal. They will also have to appoint an independent Data auditor who shall evaluate their compliance with the act.

Right to erase data, right to nominate

• Data principals will have the right to demand the erasure and correction of data collected by the data fiduciary. They will also have the right to nominate an individual who will exercise these rights in the event of death or incapacity of the data principal.
• The bill also gives consumers the right to file a complaint against a ‘Data Fiduciary’ with the Data Protection Board in case they do not get a satisfactory response from the company.

Cross-border data transfer

• The bill also allows for cross-border storage and transfer of data to “certain notified countries and territories.” However, “an assessment of relevant factors by the Central Government would precede such a notification.

Rationale

• Placing restrictions on cross-border data flows is likely to result in higher business failure rates, introduce barriers for start-ups, and lead to more expensive product offerings from existing market players.
• Ultimately, the above mandates will affect digital inclusion and the ability of Indian consumers to access a truly global internet and quality of services.

The proposal also seeks to give Union Government the powers to exempt state governments from the law in the interest of national security.

Financial penalties

• The draft also proposes to impose significant penalties on businesses that undergo data breaches or fail to notify users when breaches happen. Entities that fail to take “reasonable security safeguards” to prevent personal data breaches will be fined as high as Rs 250 crore.
• The Centre’s has revised draft Bill on personal data protection and proposed a hefty increase in penalty amounts up to ₹500 crore.

The recently proposed amendments to the Bill post consultation

• The data transfer language under Clause 17 of the bill will reportedly be reworked to allow for data to flow freely across borders.
• The Government labelled framework as an "allowed-by-default model."

Note: The current provision on cross-border data flows, as prescribed under Clause 17 of the draft data protection Bill, states that the Centre will notify countries or territories where personal data of Indian citizens can be transferred.

• Moreover, a provision on “deemed consent” in the draft Digital Personal Data Protection Bill, 2022, could also be reworded to make it stricter for private entities while allowing government departments to assume consent while processing personal data on grounds of national security and public interest.
• The Bill could also incorporate a provision to ensure it does not come in conflict with pre-existing regulations issued by other Departments or Ministries.
• These are among the key changes the government is considering to the proposed data protection Bill after feedback received from a range of stakeholders.

https://indianexpress.com/article/india/data-personal-bill-govt-plans-to-ease-norms-for-cross-border-flow-of-data-8484963/