A much-improved version | The Financial Express

A much-improved version

The latest data protection Bill takes care of many irritants for businesses, but the govt’s role as Big Brother is jarring

A much-improved version
Global companies had rightly objected to the benchmarking of the penalty to the global turnover, arguing it should be limited to the Indian geography.

The Digital Personal Data Protection Bill 2022 is undoubtedly a simpler piece of legislation than its earlier iterations. It does away with a lot of irritants for large corporations and has put in caveats for data on children. With contentious clauses relating to mirroring of data and data localisation being dropped, global Big Tech corporations will be relieved. Companies in the EU and US had expressed their reservations on the localisation of data, arguing it was too onerous and bureaucratic and would lead to cyber-security issues. The government has done well by making it easier for these companies to comply with the rules and do business. A conciliatory approach in which data can be transferred to some “friendly” countries is a welcome move, even though many say that this would amount to surrendering of data sovereignty. The intention of facilitating data flows is clearly to encourage start-ups and Big Tech. In fact, other rules relating to appointments for certain roles at start-ups, have also been relaxed. In fact, the government has gone to the extent of altering the penalty structure for violating the provisions of the law. The 2019 version of the Bill had proposed a penalty of 2-4% of the global turnover of an entity. Global companies had rightly objected to the benchmarking of the penalty to the global turnover, arguing it should be limited to the Indian geography.

Also Read: New Data Protection Bill drops 4 contentious clauses

The new framework, with a graded mechanism, is better. The penalty can go up to Rs 500 crore for both companies and persons if they fail to prevent data breaches, including accidentally disclosing, sharing, altering or destroying personal data. If data fiduciaries or data processors fail to prevent personal data breaches, the penalty could go up to Rs 250 crore. There are, however, no criminal liabilities specified for tackling cyber-security issues. In an important provision, the law would require the data fiduciary to obtain the consent of the parents or legal guardian where the personal data of children is to be processed. Allowing individuals the right to withdraw consent is also a good addition to the new legislation.

However, the provisions of the Bill that are indeed worrying relate to the government retaining the right to not comply with the rules in certain situations. The 2019 Bill was rightly criticised by stakeholders, including Justice B.N. Srikrishna—he chaired a committee of experts that had authored a draft bill in 2018—for over-emphasising the national security angle, among other reasons. The withdrawal of the Bill and the promise to introduce a fresh draft had offered hope that the new Bill will be better drafted to fulfil what is ostensibly its primary aim: Assure citizens their personal data will be secure, and their privacy will be respected by commercial interests and government agencies. While the first has been largely taken care of, the second has been ignored. Under Section 35, the central government can exempt any government agency from all or any of the provisions relating to the processing of personal data. This leaves room for misuse of power—data processing should be permitted only when the security of the nation is threatened. This needs to be looked afresh. Meanwhile, the government should get going on tabling the Bill in the Budget session as the lack of proper data protection architecture has been an anomaly when compared with major countries.

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First published on: 19-11-2022 at 04:15:00 am
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