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From Today, L G Electronics has introduced a new provision for access to the Smart TV feature requiring acceptance of 5 different agreements including the Terms of Service, Privacy Policy, Viewing Information Agreement, Voice Information and Interest based advertisement agreement.

Without accepting the agreement the part of the service related to access to apps are not available. hence it is causing denial of access to part of the service and this agreement is being imposed now though the TV was sold without this agreement.

Further the agreements are only available in Hindi and English after scrolling down. It is not convenient to read and accept the agreement as presented. Also there is no option to seek the information in  other languages as provided in the latest draft bill on Digital Personal Data Protection Bill 2022.

I am flagging this issue here so that at the appropriate time this can be addressed by the Data Protection Board.

A request has been sent to serviceindia@lge.com  to send me copies of  the agreement so that it can be studied further and whether the provision of advertisements in the content can be imposed by the hardware supplier.

This appears to be some thing like Microsoft displaying its advertisements when  you are using a Windows Computer. Some of the provisions included in the policies are not necessary for the provision of the services and are extraneous. There is also no option to opt out.

This needs further study by Privacy experts and the Ministry of Information and Broadcasting and Ministry of Information Technology.

Naavi

Reference

Washington post article

Digital Personal Data Protection Bill 2022 (DPDPB 2022) provides the following rights to the data principals namely

1.Right to Access

2.Right to Correction and erasure

3.Right to Grievance Redressal

4.Right to Nominate

There is no specific mention about the “Right to Compensation” as was available under section 62 of the earlier Bill.

Does this mean that the Data principal has no right to seek compensation?

It is possible that at the next stage Government may add “Right to Seek Compensation” as another right associated with the “Grievance Redressal” since the  harm as defined under the Act do recognize the financial gain or loss.

It is also possible to achieve a similar effect by adding a definition of “Grievance”  as any perceived harm caused to the data principal in the course of the processing of the personal data of the individual.

Since “Causation of significant loss” loss is one of the harms recognized despite the use of the word “Significant” causing its own problems, the data principle aggrieved by the breach of DPDP provisions can raise a grievance for being compensated.

However one may also take a view that the  passage of DPDPB 2022 into an act only takes down Section 43A of ITA 2000. However, the provisions of Section 43 of ITA 2000 still remains. Under Section 43, compensation can be claimed for any contravention of ITA 2000 and harm caused in a Data Breach situation can also be considered as a contravention of ITA 2000 under one of the provisions of Section 43. With this there may be a possibility of invoking ITA 2000 for compensation of the data principal as an additional remedy.

Naavi

Naavi had introduced the framework of PDPSI as Personal Data Protection Standard of India to provide a framework of compliance for compliance of PDPB 2019, the earlier draft Bill for data protection in India.

However, when JPC 2 modified the draft Bill of PDPB 2019 as DPA 2021, the Bill was renamed as “Data Protection Bill” and some aspects of regulation of nonpersonal data was brought into the Bill with the possibility of the regulator under the Act having overlapping powers with the Director CERT-In who was responsible under ITA 2000 to regulate non personal data security.

We were therefore forced to rename the PDPSI framework as DPCSI frame work meaning Data Protection Compliance Standard of India. Now that the Government has decided to keep Personal Data Protection only to this act and leave non personal data protection to ITA 2000, it is time to revert to PDPSI as the name of the framework.

The 12 standard, 50 implementation specification format will remain and the DTS calculation based on the 50 Model Implementation specifications will also remain in tact though the new Act is silent on DTS for the time being.

Naavi

One of the first things Companies look for in the Data Protection Bill is what is the cost of non compliance. It appears that the Government has been a little generous to the industry in this respect.

The first observation that we can make is that there is no “Criminal Punishment” specified in this Act. Earlier there was one section on “De-Anonymization” of anonymized information which had a criminal penalty. But any criminal penalty for contravention of DPDPA is well covered under ITA 2000 and hence there was no need to indicate the criminal punishment in this Act.

The purpose of this Act was to replace Section 43A and define “Reasonable Security Practices” more elaborately for the purpose of improving the compliance to nudge the industry to take pro-active measures to protect Personal Data. Even Protection of Non Personal Data under this Act was redundant as it stepped on the ITA 2000 provisions.

Hence it was a good move to restrict the penalties to the Civil liabilities and tag it only to contraventions of this Act  related to personal data.

The schedule of penalties are as given below:

It may be observed that the schedule avoids the “Percentage of Turnover” method which when applied would have been one additional ground for dispute.

Also penalty has been separately prescribed for not following the Reasonable Security Practice which causes a data breach from not notifying the data breach to the regulator and affected data principals or additional obligations of a Significant data fiduciary such as not appointing a DPO, Not Appointing a Data Auditor, Not conducting Data Protection Impact assessment.

The non compliance not leading to a data breach may be fined upto Rs 250 crores while a data breach may add another Rs 200 crores to the fine taking it to Rs 450 crores (maximum). In case of Significant Data Fiduciaries failing to implement additional measures, an additional Rs 150 crores may be imposed as penalty.

All Data Fiduciaries or Data Processors not fulfilling the additional obligations regarding minors may also face an additional Rs 200 crores as penalty.

Thus the maximum cumulative penalty per instance of an investigation of a data breach/non compliance  could have  added upto Rs 800 crores.  But section 25 puts a cap of Rs 500 crores.

The penalty for Data Fiduciary and Data Processor for non compliance are both similar and there is no concession to the Data Processor.

In comparison, if we look at the top 5 GDPR fines upto date they range from a maximum of Rs 6375 crores down to Rs 233 crores.  By capping the penalty at Rs 500 crores, the Government has been extremely fair and considerate and perhaps generous to the Tech industry.

The Data Protection Board will however have the discretion to apply other yardsticks to reduce the penalty. It is expected that initially the penalties may be lower and may be increased gradually as the compliance becomes more mature.

In extreme cases, the Data Protection Board may  apply the Maximum penalty limit of Rs 500 crores “per instance” by recognizing multiple instances of failure which may be in time or type of failures etc.

One way by which “Instances” can be segregated  and considered as “Multiple instances” could be when there was an opportunity for the organization to correct a breach incident and by lethargy or otherwise the organization procrastinated and a repetitive breach occurred. The immediate remedial action can assist the organization in containing the breach to a single instance.

It is time for CFOs to make provision of upto Rs 500 crores or cover it by Cyber Insurance so that at least the next breach risk is covered.

Naavi

Refer:

Views of the IT Minister

The drafting of  DPDA 2022 signifies an approach completely different from the drafting principles adopted earlier. It appears that an entirely different team worked on the Bill. It is not clear if the Ministry of Law would be comfortable with this draft since it appears to be “Over simplified” for the purpose of getting it through the Parliament. In the process a far too much has been set aside to be attended through the subordinated legislation of “Rules”.

All controversial aspects regarding the “Protection of the Right to Privacy by Law”, “Constitution of the Data Protection Board”, “Contours of Cross Border Data Transfer” or “Powers of the Government” have all been brushed under the carpet. But each on of them has to ultimately surface in the form of rules and I would not be surprised if each is contested repeatedly in the Supreme Court.

It is like a boxing match when a player ducks and sways to bide for his time and probably exhaust the opponent and strike back in later rounds. The approach appears to be, let us get the Bill passed for now and worry about the details later. But if the Boxing match has to go to 15 rounds, the ducking and swaying cannot be a winning strategy but only the punches that land on the opponent could be relevant.

In this draft of the Bill it appears that the Government thinks that it can get through  a proper legislation through the rules and it would be flexible. Partially this is true but it makes the task of DPB too onerous because it has to take the responsibility for subordinate legislation and push it through the Supreme Court.

There is a possibility that this could lead to a Judicial person being the head of DPB which  will seriously erode the functioning of the  Board. If a Judge is heading the Data Protection Board it may be judicially strong but operationally rigid.

Puritan Legal practitioners would definitely be unhappy with this over simplified version of the law. They would however be happy with the Judicial person heading the DPB. But this may be counter productive in the long run and lead to stagnation, procrastination, inefficiency and ultimately corruption.

The approach is consistent with the lack of conviction and inability to take the bull by its horn but is disappointing from the overall perspective.

We shall reserve our detailed comments for direct submission to the MeitY, but the red flags need to be raised to warn the Government that  this may not be a successful strategy but one that will haunt the Government in future with repeated legal challenges in the High Courts and Supreme Court.

Naavi

Previous Article:

DPDPB 2022-Simple,…Need to know basis…less scope for objections

The draft of DPDPB 2022 (Digital Personal Data Protection Bill 2022) has been very cleverly drafted by avoiding unnecessary details to give less scope for critics.

The Bill seems to adopt a principle that the Act needs to contain only the broad provisions and many of the details which were part of the earlier bill can be moved to the regulations after the Bill is passed.

Even the public comments to be received upto 17th December will be handled in confidence so that there will not be a disclosure of who suggested what. I would not be surprised if the Bill is passed in the December session of the Parliament itself without waiting upto the February session and the detailed regulations are presented during the February sessions. This is a good strategy to get the Bill moving.

One characteristic of the Bill that strikes the eye is its simplicity. There are only 30 sections instead of the earlier 99 sections. The IT community can feel happy that it is much easier to understand this law than the earlier versions or even the GDPR which had 98/99 sections/articles. The number of definitions have also been restricted to just 17 as against 40 in the previous Bill.

In the process of simplification, some vital aspects have been omitted and they need to be addressed through the subordinate regulations.

Some notable observations are that the definition of harm includes only “bodily harm” and omits “Psychological harm”. Perhaps “Body” should be interpreted as to include the “Mind” and the “Brain” and the definition can be extended to Psychological and Neurological harm as well.

The name as well as the provisions relate to “Digital Personal Data” and hence there may be a reason to feel that the protection of privacy as a fundamental right in oral and paper environment could be considered outside the law. Fortunately, the definition of electronic document used in ITA 2000 is wide and any paper document produced by the use of a computer (including a printer) can be considered as electronic document and brought under this law. Hence all documents processed through computers may be considered as part of this law.

The applicability clause has also been simplified without bringing in the confusion on Anonymised Personal Data.

In the data principal’s rights, the Right to Portability and Right to Forget have been omitted. This could cause some flutter but will be considered good for the industry. Along with the imposition of the duty on the data principal, frivolous complaints which are a bane in GDPR has been eliminated. This could be one of the biggest reliefs to the Data Fiduciaries.

The provision of “Deemed Consent” covers the legitimate interest of a Data Fiduciary and is similar to the previous provisions in PDPB 2019.

Significant Data Fiduciaries need to appoint an Independent Data Auditor but as of now there is no mention of Data Trust Score as a mandatory obligation. But the Auditor may perhaps use such a measurable parameter if he so decides.

The concept of “Privacy By Design” or “Privacy By Design Policy” is conspicuous by its absence though the obligation to be compliant remains.

The Significant Data Fiduciary would also be required to appoint a DPO based in India. Need for him being a Key Management Personnel has been removed but it has been indicated that he is responsible to the Board.

The provisions for transfer of data outside India have  been left to be handled by the “Adequacy” decision. Hence the controversy gets buried for the time being.

Similarly the exemptions claimed by the Government has been directly linked to the constitutional exemptions without going too much into the details so that another area of controversy is pushed to the background for the time being.

The Government retains the option to exempt some types of Data Fiduciaries and this can come in handy to provide exemptions to NGOs, Educational Institutions, Charities, Religious institutions etc if need be.

Another provision which was highly controversial earlier and has been skirted now in this draft is the constitution of the Data Protection Authority. The draft has announced that there will be a Data Protection Board which will handle the functions of the erstwhile Data Protection Authority. Again the details on its powers and functions are not included in the Bill. Even the “Code of Practice” mentioned in the erstwhile Section 50 is also absent. Hopefully many of these good things will be introduced through the regulations.

The maximum penalty is fixed at Rs 500 crores and there is no mention of any criminal punishments. The Schedule details 6 sub categories of penalties and penalties are designated as “Upto….” without percentage of turnover. In particular penalty in respect of data breach is upto Rs 200 cores while penalty for non compliance could be higher at Rs 250/-  crores. Probably in case of a data breach associated with security non compliance, the penalty could be applied for both. The maximum penalty may however be restricted to Rs 500 crores.

More analysis may follow. However it appears that the Government has ensured that there is very little scope for raising objections at this stage and we need to wait for the notifications to understand the complete implications.

(Comments welcome)

Naavi

Copy of the Act can be perused at www.dpdpa.in