High Level Comments

1. Rationale for removing the distinction between personal data and sensitive personal data is unclear.

All the earlier iterations of the Bill as well as the rules made under Section 43A of the Information Technology Act, 2000^[1] had classified data into two categories; (i) personal data; and (ii) sensitive personal data. The 2022 version of the Bill has removed this distinction and clubbed all personal data under one umbrella heading of personal data. The rationale for this is unclear, as sensitive personal data means such data which could reveal or be related to eminently private data such as financial data, health data, sexual orientations and biometric data. Considering the sensitive nature of the data, the data classified as sensitive personal data is accorded higher protection and safeguards from processing, therefore by clubbing all data as personal data, the higher protection such as the need for explicit consent to the processing of sensitive personal data, the bar on processing of sensitive personal data for employment purposes has also been removed.

2. No clear roadmap for the implementation of the Bill

The 2018 Bill had specified a roadmap for the different provisions of the Bill to come into effect from the date of the Act being notified.^[2] It specifically stated the time period within which the Authority had to be established and the subsequent rules and regulations notified.

The present Bill does not specify any such blueprint; it does not provide any details on either when the Bill will be notified or the time period within which the Board shall be established and specific Rules and regulations notified. Considering that certain provisions have been deferred to Rules that have to be framed by the Central government, the absence and/or delayed notification of such rules and regulations will impact the effective functioning of the Bill. Provisions such as Section 10(1) which deals with verifiable parental consent for data of children,  Section 13 (1) which states the manner in which a Data Principal can initiate a right to correction, the process of selection and functioning of consent manager under 3(7) are few such examples, that when the Act becomes applicable, the data principal will have to wait for the Rules to Act of these provisions, or to get clarity on entities created by the Act.

The absence of any sunrise or sunset provision may disincentivise political or industrial will to support or enforce the provisions of the Bill. An example of such a lack of political will was the establishment of the Cyber Appellate Tribunal. The tribunal was established in 2006 to redress cyber fraud. However, it was virtually a defunct body from 2011 onwards when the last chairperson retired. It was eventually merged with the Telecom Dispute Settlement and Appellate Tribunal in 2017.

We recommend that Bill clearly lays out a time period for the implementation of the different provisions of the Bill, especially a time frame for the establishment of the Board. This is important to give full and effective effect to the right of privacy of the individual. It is also important to ensure that individuals have an effective mechanism to enforce the right and seek recourse in case of any breach of obligations by the data fiduciaries.

The Board must ensure that Data Principals and Fiduciaries have sufficient awareness of the provisions of this Bill before bringing the provisions for punishment into force. This will allow the Data Fiduciaries to align their practices with the provisions of this new legislation and the Board will also have time to define and determine certain provisions that the Bill has left the Board to define. Additionally enforcing penalties for offenses initially must be in a staggered process, combined with provisions such as warnings, in order to allow first time and mistaken offenders which now could include data principals as well, from paying a high price. This will relieve the fear of smaller companies and startups and individuals who might fear processing data for the fear of paying penalties for offenses.

3. Independence of  Data Protection Board of India.

The Bill proposes the creation of the Data Protection Board of India (Board) in place of the Data Protection Authority. In comparison with the powers of the Board with the 2018 and 2019 version of Personal Data Protection Bill, we witness an abrogation of powers of the Board  to be created, in this Bill. Under Clause 19(2), the strength and composition of the Board, the process of selection, the terms and conditions of appointment and service, and the removal of its Chairperson and other Members shall be such as may be prescribed by the Union Government at a later stage. Further as per Clause 19(3), the Chief Executive of the Board will be appointed by the Union Government and the terms and conditions of her service will also be determined by the Union Government. The functions of the Board have also not been specified under the Bill, the Central Government may assign the functions to be performed by the Board.

In order to govern data protection effectively, there is a need for a responsive market regulator with a strong mandate, ability to act swiftly, and resources. The political nature of  personal data also requires that the governance of data, particularly the rule-making and adjudicatory functions performed by the Board are independent of the Executive.

Chapter Wise Comments and Recommendations

CHAPTER I- PRELIMINARY

● Definition: While the Bill has added a few new definitions to the Bill including terms such as gains, loss, consent manager etc. there are a few key definitions that have been removed from the earlier versions of the Bill. The removal of certain definitions in the Bill, eg. sensitive personal data, health data, biometric data, transgender status, creating a legal uncertainty about the application of the Bill.

With respect to the existing definitions as well the definition of the term ‘harm’ has been significantly reduced to remove harms such as surveillance from the ambit of harms. In addition, with respect of the definition of the term of harms also, the 2019 version of the Bill under Clause 2 (20) the definition provides a non exhaustive list of harms, by using the phrase “harms include”, however in the new definition the phrase has been altered to “harm”, in relation to a Data Principal, means”, thereby removing the possibility of more harms that are not apparent currently from being within the purview of the Act. We recommend that the definition of harms be made into a non-exhaustive list.

CHAPTER II - OBLIGATIONS OF DATA FIDUCIARY

Notice: The revised Clause on notice does away with the comprehensive requirements which were laid out under Clause 7 of the PDP Bill 2019. The current clause does not mention in detail what the notice should contain, while stating that that the notice should be itemised. While it can be reasoned that the Data Fiduciary can find the contents of the notice throughout the bill, such as with the rights of the Data Principal, the removal of a detailed list could create uncertainty for Data Fiduciaries. By leaving the finer details of what a notice should contain, it could cause Data Fiduciaries from missing out key information from the list, which in turn provide incomplete information to the Data Principal. Even in terms of Data Fiduciaries they might not know if they are complying with the provisions of the bill, and could result in them invariably being penalised. In addition to this by requiring less work by the Data Fiduciary and processor, the burden falls on the Data Principal to make sure they know how their data is processed and collected. The purpose of this legislation is to create further rights for individuals and consumers, hence the Bill should strive to put the individual at the forefront.

In addition to this Clause 6(3) of the Bill states “The Data Fiduciary shall give the Data Principal the option to access the information referred to in sub-sections (1) and (2) in English or any language specified in the Eighth Schedule to the Constitution of India.” While the inclusion of regional language notices is a welcome step, we suggest that the text be revised as follows “The Data Fiduciary shall give the Data Principal the option to access the information referred to in sub-sections (1) and (2) in English and in any language specified in the Eighth Schedule to the Constitution of India.” While the main crux of notice is to let the person know before giving consent, notice in a language that a person cannot read would not lead to meaningful consent.

Consent

Clause 3 of the Bill states “request for consent would have the contact details of a Data Protection Officer, where applicable, or of any other person authorised by the Data Fiduciary to respond to any communication from the Data Principal for the purpose of exercise of her rights under the provisions of this Act.” Ideally this provision should be a part of the notice and should be mentioned in the above section. This is similar to Clause 7(1)(c) of the draft Personal Data Protetion Bill 2019 which requires the notice to state “the identity and contact details of the data fiduciary and the contact details of the data protection officer, if applicable;”.

Deemed Consent

The Bill  introduces a new type of consent that was absent in the earlier versions of the Bill. We are of the understanding that deemed consent is used to redefine non consensual processing of personal data. The use of the term deemed consent and the provisions under the section while more concise than the earlier versions could create more confusion for Data Principals and Fiduciaries alike. The definition and the examples do not shed light on one of the key issues with voluntary consent - the absence of notice. In addition to this the Bill is also silent on whether deemed consent can be withdrawn or if the data principal has the same rights as those that come from processing of data they have consented to.

Personal Data Protection of Children

The age to determine whether a person has the ability to legally consent in the online world has been intertwined with the age of consent under the Indian Contract Act; i.e. 18 years. The Bill makes no distinction between a 5 year old and a 17 year old- both are treated in the same manner. It assumes the same level of maturity for all persons under the age of 18. It is pertinent to note that the law in the offline world does recognise that distinction and also acknowledges the changes in the level of maturity. As per Section 82 of the Indian Penal Code read with Section 83, any act by a child under the age of 12 shall not be considered as an offence. While the maturity of those aged between 12–18 years will be decided by court (individuals between the age of 16–18 years can also be tried as adults for heinous crimes). Similarly, child labour laws in the country allow children above the age of 14 years to work in non-hazardous industry

There is  a need to evaluate and rethink the idea that children are passive consumers of the internet and hence the consent of the parent is enough. Additionally, the bracketing of all individuals under the age of 18 as children fails to look at how teenages and young people use the internet. This is more important looking at the 2019 data which suggests that two-thirds of India’s internet users are in the 12–29 years age group, with those in the 12–19 age group accounting for about 21.5% of the total internet usage in metro cities. Given that the pandemic has compelled students and schools to adopt and adapt to virtual schools, the reliance on the internet has become ubiquitous with education. Out of an estimated 504 million internet users, nearly one-third are aged under 19. As per the Annual Status on Education Report (ASER) 2020, more than one-third of all schoolchildren are pursuing digital education, either through online classes or recorded videos.

Instead of setting a blanket age for determining valid consent, we could look at alternative means to determine the appropriate age for children at different levels of maturity, similar to what had been developed by the U.K. Information Commissioner’s Office. The Age Appropriate Code prescribes 15 standards that online services need to follow. It broadly applies to online services "provided for remuneration"—including those supported by online advertising—that process the personal data of and are "likely to be accessed" by children under 18 years of age, even if those services are not targeted at children. This includes apps, search engines, social media platforms, online games and marketplaces, news or educational websites, content streaming services, online messaging services.

The reservation to definition of child under the Bill has also been expressed by some members of the JPC through their dissenting opinion. MP Ritesh Pandey stated that keeping in mind the best interest of the child the Bill should consider a child to be a person who is less than 14 years of age. This would ensure that young people could benefit from the advances in technology without parental consent and reduce the social barriers that young women face in accessing the internet. Similarly Manish Tiwari in his dissenting note also observed that the regulation of the processing of data of children should be based on the type of content or data. The JPC Report observed that the Bill does not require the data fiduciary to take fresh consent of the child, once the child has attained the age of majority, and it also does not give the child the option to withdraw their consent upon reaching the majority age. It therefore, made the following recommendations:

Registration of data fiduciaries, exclusively dealing with children’s data. Application of the Majority Act to a contract with a child. Obligation of Data fiduciary to inform a child to provide their consent, three months before such child attains majority  Continuation of the services until the child opts out or gives a fresh consent, upon achieving majority. However, these recommendations have not been incorporated into the provisions of the Bill. In addition to this the Bill is silent on the status of non consensual processing and deemed consent with respect to the data of children.

We recommend that fiduciaries who have services targeted at children should be considered as significant Data Fiduciaries. In addition to this the Bill should also state that the guardians could approach the Data Protection Board on behalf of the child. With these obligations in place, the age of mandatory consent could be reduced and the data fiduciary could have an added responsibility of informing the children in the simplest manner how their data will be used. Such an approach places a responsibility on Data Fiduciaires when implementing services that will be used by children and allows the children to be aware of data processing, when they are interacting with technology.

Chapter III-RIGHTS AND DUTIES OF DATA PRINCIPAL

Rights of Data Principal

Clause 12(3) of the Bill while providing the Data Principal the right to be informed of the identities of all the Data Fiduciaries with whom the personal data has been shared, also states that the data principal has the right to be informed of the categories of personal data shared. However the current version of the Bill provides only one category of data that is personal data.

Clause 14 of the Bill talks about the Right of Grievance Redressal, and  states that the Data Principal has the right to readily available means of registering a grievance, however the Bill does not provide in the Notice provisions the need to mention details of a grievance officer or a grievance redressal mechanism. It is only  the additional obligations on significant data fiduciary that mentions the need for a Data Protection officer to be the contact for the grievance redressal mechanism under the provisions of this Bill. The Bill could ideally re-use the provisions of the IT Act SPDI Rules 2011 in which Section 5(7) states “Body corporate shall address any discrepancies and grievances of their provider of the information with respect to processing of information in a time bound manner. For this purpose, the body corporate shall designate a Grievance Officer and publish his name and contact details on its website. The Grievance Officer shall redress the grievances or provider of information expeditiously but within one month ' from the date of receipt of grievance.”

The above framing would not only bring clarity to the data fiduciaries on what process to follow for a grievance redressal, it also would reduce the significant burden of theBoard.

Duties of Data Principals

The Bill while entisting duties of the Data Principal states that the “Data Principal shall not register a false or frivolous grievance or complaint with a Data Fiduciary or the Board”, however it is very difficult for a Data Principal to and even for the Board to determine what constitutes a “frivolous grievance”. In addition to this the absence of a defined notice provision and the inclusion of deemed consent would mean that the Data Fiduciary could have more information about the matter than the Data Principal. This could mean that the fiduciary could prove that a claim was false or frivolous. Clause 21(12) states that “At any stage after receipt of a complaint, if the Board determines that the complaint is devoid of merit, it may issue a warning or impose costs on the complainant.” In addition to this Clause 25(1) states that “ If the Board determines on conclusion of an inquiry that non- compliance by a person is significant, it may, after giving the person a reasonable opportunity of being heard, impose such financial penalty as specified in Schedule 1, not exceeding rupees five hundred crore in each instance.” The use of the term “person” in this case includes data which could mean that they could be penalised under the provisions of the Bill, which could also include not complying with the duties.

CHAPTER IV- SPECIAL PROVISIONS

Transfer of Personal Data outside India

Clause 17 of the Bill has removed the requirement of data localisation which the 2018 and 2019 Bill required. Personal data can be transferred to countries that will be notified by the central government. There is no need for a copy of the data to be stored locally and no prohibition on transferring sensitive personal data and critical data. Though it is a welcome change that personal data can be transferred outside of India, we would highlight the concerns in permitting unrestricted access to and transfer of all types of data. Certain data such as defence and health data do require sectoral regulation and ringfencing of the transfer of data.

Exemptions

Clause 18 of the Bill has widened the scope of government exemptions. Blanket exemption has been given to the State under Clause 18(4) from deleting the personal data even when the purpose for which the data was collected is no longer served or when retention is no longer necessary. The requirement of proportionality, reasonableness and fairness have been removed for the Central Government to exempt any department or instrumentality from the ambit of the Bill. By doing away with the four pronged test, this provision is not in consonance with test laid down by the Supreme Court and are also incompatible with an effective privacy regulation. There is also no provision for either a prior judicial review  of the order by a district judge as envisaged by the Justice Srikrishna Committee Report or post facto review by an oversight committee of the order as laid down under the Indian Telegraph Rules, 1951^[3] and the rules framed under Information Technology Act^[4]. The provision states that such processing of personal data shall be subject to the procedure, safeguard and oversight mechanisms that may be prescribed.