Proposed ecommerce provisions at WTO: See how they can impact personal data

By: | Published: August 31, 2017 4:17 AM

In the present age, almost each action of individuals and businesses, a simple online search, a social media activity or an online transaction, generates data.

world trade organization, WTO geneva, WTO OMC, ecommerce, personal data, right to privacy, fundamental rightMost of the e-commerce proposals in the WTO advocate cross-border free flow of data without any control of government, barring a few exceptions. (Photo: Reuters)

The Supreme Court, in a landmark judgment, said that the right to privacy is a fundamental right. The right to privacy includes an individual’s right to make personal choices. The judgment also covered privacy issues in the context of technological development and use of data generated by individuals actively or passively on internet by private players. The SC decision is also very pertinent for e-commerce and related discussions at the WTO and their implications for India. Most of the e-commerce proposals in the WTO advocate cross-border free flow of data without any control of government, barring a few exceptions. The US non-paper on e-commerce submitted at the WTO stipulates that companies and consumers must be able to move data as they see fit. TPP e-commerce chapter also requires that each member shall allow the cross-border transfer of information by electronic means, including personal information, when this activity is for the conduct of the business.

In the present age, almost each action of individuals and businesses, a simple online search, a social media activity or an online transaction, generates data. This data contains important information about human behaviour and customer choices, tastes and preferences. If one searches flight options for a destination in Google, he gets promotional messages advertising flight options for the same destination in his Facebook account and other web pages. It implies that the data about a person’s choices, taste and preferences is shared by one online entity with another entity without explicit consent of the consumer. Could it be termed as violation of an individual’s right to privacy? In this context, it is important to note the relevant excerpts of the judgement delivered by Justice Sanjay Kishan Kaul in the Right to Privacy case. He wrote that one aspect of the right to privacy is an individual’s right to control dissemination of his personal information, and this aspect has gained special significance in view of technological improvements. The right of an individual to exercise control over his personal data and to be able to control his/her own life would also include his right to control his existence in the virtual world.

The right to privacy could be endangered both by the state and non-state actors. Social network providers, search engines, e-mail service providers, messaging applications, etc, are examples of non-state actors. Due to technological developments, not only the state but also big corporations and private entities can behave like Big Brother. There is an urgent need for regulation pertaining to storing, processing and use of information by non-state actors and state intervention may be required for enforcing claims against non-state actors. Therefore, it could be inferred from the judgment that there is a need for regulatory intervention by the government for protecting data privacy of its citizens. However, the proposed e-commerce provisions at the WTO would undermine the ability of the government to secure citizens’ privacy against unauthorised or unlawful processing or accidental loss or destruction of, or damage to, personal data. By agreeing to allowing free flow of cross-border data, the government would not be able to impose any restrictions on cross-border data flows, whether business to business (B2B) or business to consumer (B2C). Thus, the critical issue is how the privacy and security of an individual’s data will be ensured if allowed free cross-border transfer of data.

Another pertinent question would be whether a company can force individuals to agree to its terms and conditions of sharing personal information with other entities as part of its service agreement. Would such forced consent also constitute violation of the right to privacy? One may like to recall the terms and conditions of WhatsApp new privacy policy last year that force users to give consent to share their data, including phone numbers, with its parent company, Facebook. The matter is sub-judice and the Supreme Court has set-up five-judge bench in April 2017 to decide on the petition challenging the privacy policy of WhatsApp. Apart from the privacy issues, there also exist commercial issues that should not be overlooked by the government. According to the IBM report, 90% of the data in the world today has been created in the last two years alone, with new data being added to this pool at the rate of approximately 2.5 quintillion bytes of data every day.

This data contains important information for business decisions. The pertinent questions in this regard are: Should data having such high commercial value be transferable freely across borders, and will this benefit only multinational companies operating across borders or are there any gains to Indian companies from such free cross-border transfer of data? The SC decision indicates active role of the government in protecting the right to privacy through regulations in the context of dissemination of personal information by private entities. The proposed e-commerce provisions in the WTO would grant businesses the freedom to locate data storage and processing to any other jurisdiction without any limitation. This will undermine the flexibilities and policy space available to the government under the existing or future cyber security policies for protecting their citizens’ data privacy.

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