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3rd August 2018 The Hindu Editorial Analysis under 10 mins series
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Localisation of data and data protection; E-commerce regulation bill

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  1. 3rd Aug 2018 THE HINDU Editorial Analysis ha ii


  2. Data localisation is no solution Calls for data localisation are not new. It has been the main demand of Indian policymakers' from foreign technology companies. The Justice Srikrishna Committee in its report accompanying the draft Personal Data Protection Bill released on July 27 notes that eight of the top 10 most accessed websites in India are owned by U.S. entities This reality has often hindered Indian law enforcement agencies, where the Police officials are forced to rely on a long and tiresome bilateral process with the U.S. government to obtain electronic evidence from U.S. communication providers. [Apple-FBI] The committee seeks to correct this The Bill calls for a copy of user data to be mandatorily localised in India, believing that it will "boost" law enforcement efforts to access data


  3. ....necessary for investigation and prosecution of crimes. If passed in this form, however, the law will be counterproductive, hurting law enforcement efforts and undermining user rights in the process . The last few months have witnessed an amplification in data localisation demands, with the Reserve Bank of India, to take one example, calling for local storage of financial data. A fundamental error that the Srikrishna Committee seems to have made is in its belief that the location of data should determine who has access to it - The reason that Indian law enforcement relies on an outdated Mutual Legal Assistance Treaty (MLAT) process to obtain data stored by U.S. companies is because the U.S. law effectively bars these companies from disclosing user data to foreign law enforcement authorities


  4. Technology companies are allowed to share data such as content of an email or message only upon receiving a federal warrant from U.S. authorities. This scenario will not change even after technology companies relocate Indian data to India o The committee too acknowledges that data localisation is not a perfect solution. Its decision is borne out of hope that when questions of data access are determined, their storage here will give rise to a strong Indian claim Even if Indian authorities force compliance from U.S. companies, it will only solve a part of the problem. The draft bill mandates local storage of data relating to Indian citizens only. Localisation can provide data only for crimes that have been committed in India, where both the perpetrator and victim are situated in India


  5. Prevalent concerns around transnational terrorism, cyber crimes and money laundering that the committee rightly highlights will often involve individuals and accounts that are not Indian, and therefore will not be stored in India. For investigations into such crimes, Indian law enforcement will have to continue relying on cooperative models like the MLAT process . Questions around whether access to data is determined by the location of the user, location of data or the place of incorporation of the service provider have become central considerations for governments seeking to solve the complication of cross-border data sharing The Clarifying Lawful Overseas Use of Data (CLOUD) Act, passed by the U.S. Congress earlier this year, seeks to de-monopolise control over data from U.S. authorities. The law will for the first time allow tech companies...


  6. ....to share data directly with certain foreign governments This, however, requires an executive agreement between the U.S. and the foreign country certifying that the state has robust privacy protections, and respect for due process and the rule of law On procedural questions of law enforcement access, the bill relies on legacy provisions such as Section 91 of the Code of Criminal Procedure (empowering police to access any "document or thing") will continue to apply lacking review or oversight by a judicial or independent authority The Committee, while imposing data localisation, should have also necessarily tackled how this data will be obtained by police authorities whether within its mandate or not


  7. The CLOUD Act creates a potential mechanism through with countries such as India can request data not just for crimes committed within their borders but also for transnational crimes involving their state interests Access to data would be determined by where the user is located and the reasonableness of claim that a country has in seeking her data. The draft Bill was an opportunity to update India's data protection regime to qualify for the CLOUD Act . The Bill, while recognising principles of legality, "necessity and proportionality" for data processing in the interest of national security and investigation of crimes, fails to etch out the procedural rules necessary for actualising these principles. Even basic requirements such as a time limit for which data can be stored by law enforcement are missing from the Bill


  8. o The Committee has sought to localise data for law enforcement but categorically refused to offer this data any procedural protection. The Committee has instead placed the onus on Parliament to enact another comprehensive legislation for surveillance reform With the highest number of users of American technology offerings and a high number of user data requests, second only to the U.S., India is a clear contender for a partnership of benefit under the CLOUD Act


  9. Discounting logic A task force of the Union Commerce Ministry has submitted the draft National Policy on Electronic Commerce, which will now be studied by a 70-member think tank chaired by the Union Commerce, Industry and Civil Aviation Minister o India's e-tail business, estimated to be worth around $25 billion, is still a fraction of the overall retail sector in the country, but it has been witness to some fast and uncontrolled activity of late, including the merger betweern home-grown, but Singapore-based, Flipkart and global giant Walmart Over the coming decade, the e-commerce share is expected to swell to $200 billion, fuelled by smartphones, cheaper data access and growing spends


  10. o The draft policy proposes the creation of a single national regulator to oversee the entire industry, although operationalising its different features would require action from multiple Ministries and regulators This would also need amendments to existing legislation and rulebooks. Consumer protection norms to guard online shoppers from possible frauds too are overdue. As per data available for the first eight months of 2017-18, over 50,000 e-commerce grievances were made to the Consumer Affairs Ministry helpline Traditional retailers too have voiced concerns about large e-tail players with deep influence, pricing the retailers out of the market, and have been seeking a level playing field Among the ideas in the draft policy are a sunset clause on discounts that...