The Personal Data Protection Bill, 2018

After months of speculation, the Committee of Experts on data protection (“Committee”), led by Justice B N Sri Krishna, has submitted its recommendations and a draft data protection bill to the Ministry of Electronics and Information Technology (“MEITY”) today. As we sit down for some not-so-light weekend reading to understand what our digital futures could look like if the committee’s recommendations are adopted, this series puts together a quick summary of the Personal Data Protection Bill, 2018 (“Bill”).

Scope and definitions

The Committee appears to have moved forward with the idea of a comprehensive, cross-sectoral data protection legislation that was advocated in its white paper published late last year. The Bill is meant to apply to (i) the processing of any personal data, which has been collected, disclosed, shared or otherwise processed in India; and (ii) the processing of personal data by the Indian government, any Indian company, citizen, or person / body of persons incorporated or created under Indian law. It also applies to any persons outside of India that engage in processing personal data of individuals in India. It does not apply to the processing of anonymised data.

The Bill continues to use the 2-level approach in defining the type of information that the law applies to. However, the definitions of personal data and sensitive personal data have been expanded upon significantly when compared to the definitions in our current data protection law.

Personal data includes “data about or relating to a natural person who is directly or indirectly identifiable, having regard to any characteristic, trait, attribute or any other feature of the identity of such natural person, or any combination of such features, or any combination of such features with any other information”. The move towards relying on ‘identifiability’, when read together with definitions of terms such as ‘anonymisation’, which focuses on irreversibility of anonymisation, is welcome, given that section 2 clearly states that the law will not apply in relation to anonymised data. However, the ability of data processors / the authority to identify whether an anonymisation process is irreversible in practice will need to be examined, before the authority sets out the criteria for such ‘anonymisation’.

Sensitive personal data on the other hand continues to be defined in the form of a list of different categories, albeit a much more expansive list, that now includes information such as / about official identifiers, sex life, genetic data, transgender status, intersex status, caste or tribe, and religious and political affiliations / beliefs.

Interestingly, the Committee has moved away from the use of other traditional data protection language such as data subject and data controller – instead arguing that the relationship between an individual and a person / organisation processing their data is better characterised as a fiduciary relationship. Justice Sri Krishna emphasised this issue during the press conference organised at the time of submission of the report, noting that personal data is not to be considered property.

Collection and Processing

The Bill elaborates on the notice and consent mechanisms to be adopted by ‘data fiduciaries’, and accounts for both data that is directly collected from the data principal, and data that is obtained via a third party. Notice must be given at the time of collection of personal data, and where data is not collected directly, as soon as possible. Consent must be obtained before processing.

The Committee’s earlier white paper, and the report accompanying the Bill have both discussed the pitfalls in a data protection framework that relies so heavily on consent – noting that consent is often not informed or meaningful. The report however also notes that it may not be feasible to do away with consent altogether, and tries to address this issue by way of adopting higher standards for consent, and purpose limitation. The Bill also provides that consent is to be only one of the grounds for processing of personal data. However, this seems to result in some catch-all provisions allowing processing for ‘reasonable purposes’. While it appears that these reasonable purposes may need to be pre-determined by the data protection authority, the impact of this section will need to be examined in greater detail. The other such wide provision in this context seems to allow the State to process data – another provision that will need more examination.

Sensitive personal data

Higher standards have been proposed for the processing of sensitive personal data, as well as personal / sensitive personal data of children. The emphasis on the effect of processing of certain types of data, keeping in mind factors such as the harm caused to a ‘discernible class of persons’, or even the provision of counselling or child protection services in these sections is welcome. However, there remains a wide provision allowing for the State to process sensitive personal data (of adults), which could be cause for concern.

Rights of data principals

The Bill also proposes 4 sets of rights for data principals: the right to confirmation and access, the right to correction, the right to data portability, and the right to be forgotten. There appears to be no right to erasure of data, apart from a general obligation on the data fiduciary to delete data once the purpose for collection / processing of data has been met. The Bill proposes certain procedural requirements to be met by the data principal exercising these rights – an issue which some have already pointed out may be cause for concern.

Transparency and accountability

The Bill requires all data fiduciaries to adopt privacy by design, transparency and security measures.

Each data fiduciary is required to appoint a data protection officer, conduct data protection impact assessments before the adoption of certain types of processing, maintain records of data processing, and conduct regular data protection audits. These obligations are applicable to those notified as ‘significant data fiduciaries’, depending on criteria such as the volume and sensitivity of personal data processed, the risk of harm, the use of new technology, and the turnover of the data fiduciary.

The requirements for data protection impact assessments is interesting – an impact assessment must be conducted before a fiduciary undertakes any processing involving new technologies, or large scale profiling or use of sensitive personal data such as genetic or biometric data (or any other data processing which carries a risk of significant harm to data principals). If the data protection authority thinks that such processing may cause harm (based on the assessment), they may direct the fiduciary to cease such processing, or impose conditions on the processing. The language here implies that these requirements could be applicable to processing by the State / private actors, where new technology is used in relation to Aadhaar, among other things. However, as mentioned above, this will be subject to the data fiduciary in question being notified as a ‘significant data fiduciary’.

In a welcome move, the Bill also provides a process for notification in the case of a breach of personal data by data fiduciaries. However, this requirement is limited to notifying the data protection authority, which then decides whether there is a need to notify the data principal involved. It is unfortunate that the Committee has chosen to limit the rights of data principals in this regard, making them rely instead on the authority to even be notified of a breach that could potentially harm them.

Cross border transfer of data

In what has already become a controversial move, the Bill proposes that at least one copy of all personal data under the law, should be stored on a server or data centre located in India. In addition, the central government (not the data protection authority) may notify additional categories of data that are ‘critical’ and should be stored only in India.

Barring exceptions in the case of health / emergency services, and transfers to specific international organisations, all transfer of personal data outside India will be subject to the approval of the data protection authority, and in most cases, consent of the data principal.

This approval may be in the form of approval of standard contractual clauses applicable to the transfer, or a blanket approval of transfers to a particular country / sector within a country.

This provision is ostensibly in the interest of the data principals, and works towards ensuring a minimum standard of data protection. The protection of the data principal under this provision, like many other provisions, including those relating to data breach notifications to the data principal, will be subject to the proper functioning of the data protection authority. In the past, we have seen that simple steps such as notification of security standards under the Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011, have not been undertaken for years.

In the next post in this series, we will discuss the functions of the authority, and other provisions in the Bill, including the exemptions granted, and penalties and remedies provided for.

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