Dpdp

WRITE FOR TOI BLOGS OPINION TECH Digital Personal Data Protection Act 2023 – A game changer August 21, 2023, 11:31 PM IST Dr. Kembai Srinivasa Rao in Kembai Speaks, Tech, TOI FACEBOOK TWITTER LINKEDIN EMAIL Dr. Kembai Srinivasa Rao Dr Rao is currently teaching risk management in the institute of Insurance and Risk Management (IIRM). A career banker with B … MORE The much-awaited Digital Personal Data Protection Act (DPDPA) – 2023 comes into force on August 11, 2023, meant to safeguard the rights and duties related to the management of massive digital personal data accumulating in the economy. The widespread use of information, communication, and Technology (ICT) led to the creation of massive digital data which if explored could be a valuable means for business transformation. There is every effort by market players to access data and make us of it to identify opportunities. By 2025, IDC projects that the total size of data generated worldwide could reach 175 trillion Zettabytes. In India, the digital population reached close to 700 million active internet users with 467 million social media users creating mammoth digital data. As a result, India has emerged as the second-largest internet market. When digital data has emerged as an all-pervasive business enabler, its generation, ownership, sharing, data protection and maintenance of mutual trust among data transmitters assume greater significance. Way back in 2006, the British mathematician Mr. Clive Humpy was able to visualize the importance of data and said that ‘Data is the New Oil’. Digital data has become a precious tradeable commodity that can potentially be a competitive leverage for market players. Law to protect data privacy is important and hence, in articulating DPDPA, the spirit of Organisation for Economic Co-operation and Development (OECD) guidance is also followed where it outlines that data privacy should be recognized as the global minimum standard for privacy and data protection. It forms a solid foundation for building effective protection and trust for individuals and developing common international approaches to transborder data flows. The OECD promotes a holistic approach to privacy and data protection and is continuously working with countries and experts to widen the scope of developments to evolve data Privacy Guidelines in today’s digital environment. It is a continuous journey to develop and upgrade data protection laws. Similarly, according to United Nations Conference on Trade and Development (UNCTAD), as more and more social and economic activities are driven in digital mode, the importance of privacy and data protection is increasingly recognized. The collection, use, and sharing of personal information to third parties without notice or consent of consumers is not to be permitted and legislation for data protection is necessary. In this context, 137 out of 194 countries had put in place legislation to secure the protection of data and privacy and India joins the league. DPDPA is comprehensive in providing data protection with appropriate reinforcing checks and balances to safeguard the interest of all stakeholders. Drilling down the DPDPA contents will be interesting to understand its duties and responsibilities cast on different stakeholders and its penal provisions to ensure its compliance. Key stakeholders: Among many stakeholders forming part of the act, some key players in providing a well-insulated data protection ecosystem will be important to understand its protective framework. (i) Data Principal (DP) – the data owner. DP could be individuals or entities whose data is to be protected. The DP has to give written consent to generate and process the data indicating the specific purpose of its use. DP can withdraw the consent at any time or can restrict its use. (ii) Data Fiduciary– A data collecting, storing, and sharing entity. A data fiduciary also acts as a “Consent Manager” who enables a DP to give, manage, review, and withdraw consent through an accessible, transparent, and interoperable platform. The Central Government may notify any Data Fiduciary or class of Data Fiduciaries as Significant Data Fiduciaries, on the basis of an assessment of relevant factors when they turn out to be systemically significant. (iii) Data Processor– an entity processing the data on behalf of a data fiduciary. Both Data fiduciary and data processor could also be the same in certain small entities. (iv)Data Protection Officer (DPO) – could be any individual appointed as DPO by a Data Fiduciary under the provisions of this Act. (v) Data Protection Board of India (DPBI) – government shall identify and protect personal data in its possession or under its control by taking reasonable security safeguards to prevent personal data breaches. An appeal against any order of the DPBI shall lie with the High Court. Every appeal made under this section shall be preferred within a period of sixty days from the date of the order appealed against. The High court could take up any breach Suo moto. At the same time, no civil court shall have the jurisdiction to entertain any suit or take any action in respect of any matter under the provisions of this Act and no injunction shall be granted by any court or other authority in respect of any action taken under the provisions of this Act. A person may process the personal data of a DP only in accordance with the provisions of this Act and Rules made thereunder, for a lawful purpose for which the DP has given or is deemed to have given his/her consent. Cross-border storage of data: Since its adoption in 2018, the General Data Protection Regulation (GDPR) of the EU has become the baseline for a wave of new data protection legislation that has swept the globe. Many lawmakers around the world have sought parity with GDPR in hopes of a positive adequacy ruling from the European Commission, which would allow a free data flow between their country and the European market. According to Gartner, by 2023, 65 percent of the world’s population will have its personal data covered under modern privacy regulations. In DPDPA too taking into consideration, the mutual cooperation between countries and integration of global markets, the central government may, after an assessment of such factors as it may consider necessary, notify such countries or territories outside India to which a Data Fiduciary may transfer personal data, in accordance with such terms and conditions as may be specified. Data should be stored in India and may be transferred outside India for processing if explicitly consented to by the data principal for such transfer and subject to certain additional conditions. Penalty for infringement: Any breach of data protection or non-compliance with the DPDPA could invite financial penalties. The DPBI after the conclusion of an inquiry that non-compliance by a person is significant, may, after giving the person a reasonable opportunity of being heard, impose such financial penalty not exceeding rupees five hundred crore (upper limit) in each instance. But depending upon the gravity of the breach of the act, the violation of sections of the act, the financial penalty could range from as high as Rs. Two hundred fifty crores to a data fiduciary or data processor to as low as Rs.10000 to a data principal (the owner of data). However, while determining the amount of a financial penalty to be imposed under sub-section (1) of DPDPA, the DPBI shall have regard to the following matters: (a) the nature, gravity, and duration of the non-compliance; (b) the type and nature of the personal data affected by the non-compliance; (c) repetitive nature of the non-compliance; (d) whether the person, as a result of the non-compliance, has realized a gain or avoided any loss; (e) whether the person took any action to mitigate the effects and consequences of the non-compliance, and the timeliness and effectiveness of that action; (f) whether the financial penalty to be imposed is proportionate and effective, having regard to achieving compliance and deterring non-compliance with the provisions of this Act; and (g) the likely impact of the imposition of the financial penalty on the person. The enactment of DPDPA can be a game-changer in the regulation and management of digital personal data and protect its privacy and sanctity. It will pave the way for conscious digital data collection, storage, and protection where the DP is kept at the center stage in permitting the use of data. FACEBOOK TWITTER LINKEDIN EMAIL DISCLAIMER Views expressed above are the author’s own. 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