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A peculiar issue has emerged in the Supreme Court today where, the petition on the Privacy Policy of WhatsApp filed in 2017 is now forcing a new hearing on January 17, 2023. This is pushed to be the final hearing in this case and may provide immunity to WhatsApp to go ahead with its proposal to use the Privacy Policy it has proposed under the blessings of the Supreme Court.

If Supreme Court upholds the petition, it would adversely affect many provisions that the Government may be planning to introduce on Intermediary liability through the Intermediary Guidelines, the Telecom Bill, the Data Protection Bill and the future amendments to the ITA 2000.

The issue which prompted the petition was that WhatsApp wanted to amend its Privacy Policy and had issued a notice that unless a specific Privacy policy is agreed to, it would stop the services for the Indian users.

The objection to the Privacy Policy was that it did not provide adequate Privacy protection to Indian users and at the same time provided a better Privacy protection to EU users clearly discriminating the Indian users  against the EU Users.

Naavi.org had also pointed out that the Privacy Policy was also objectionable since it provided grievance redressal to users with a jurisdiction of the US Court bypassing the Indian Court system.

Now, in the urgent hearing that took place today, reference was made to the Government withdrawing the PDPB 2019 and the proposal to come up with a new version. At the same time there was no discussion that if the Government has promised to get the Bill passed in the next Budget session, where is the need for urgent disposal of the case through a hearing as finally agreed to in January 2023 before the Budget session.

Strangely the impression given to the Court  appeared to that new Bill is being created only to address the WhatsApp issue as if it is an attempt to put them in an adverse position which should be prevented.

At the end, the Court ordered that by December 15, 2022, all the counsels would provide their pleadings and a final hearing would be held on January 17, 2023.

The hearing is before the Constitutional Bench as if the Privacy Policy of WhatsApp is a constitutional issue.

We are all aware that the concern of WhatsApp is commercial exploitation of the personal data of Indian users before the Government bringing in some form of restrictions on transfer of data outside India.  This could seriously affect the commercial interest of Face Book and it is not clear   if this is an issue involving the Protection of Privacy of Indian Citizens. It could turn out to be a classic case of using the Privacy pretext to protect the business interests of Face Book.

The counsel representing the Government (Solicitor General Mr Tushar Mehta) did not provide the confidence that  the interest of the Indian Government would be fully protected against the WhatsApp’s demands. There could be a serious need for intervention of an appropriate body to ensure that the Government does not deliberately give away the case to WhatsApp.

The honourable Supreme Court  also appeared to be unclear at this time of the issues involved in the WhatsApp petition and will be dependent on the pleadings to be filed. If the Government counsel plays a weak hand, the case would be won by WhatsApp before it starts.

Nobody seem to also remember that at present the law applicable for this case is Information Technology Act 2000 as amended in 2008 and even if the new Bill is tabled in draft form in the coming session of the Parliament is unlikely to be passed when the Court sits for a final hearing and hence the case has to be decided on the current law of privacy protection as enshrined in Section 43A/79 and its rules.

If these issues are not properly placed before the Supreme Court,  the decision of the Supreme Court in January 2023 will be based in inadequate information and on a wrong position of law. It could also bring undue pressure on the Government which may force an immature version of the new draft law .

There is a hint that there is a conspiracy to let the Data Horse bolt away before the stable is locked.

We need to wait and see how the media interprets this development tomorrow.

In the meantime, I request that an appropriate legal firm which has a comprehensive view of the issues involved intervenes  in the case.

Naavi

Related Articles:

WhatsApp petition deserves to be rejected at admission stage itself.

WhatsApp relegates India to the Third World of Privacy Regulation

WhatsApp needs to change its Jurisdiction clause in the Terms or else, exit from India.

Continued from previous article

Another unique concept relevant to the Telecom Bill is the “Right of Way”. This is a right under which a telecom infrastructure provider will be facilitated the use of public property upon application. Rejection can be only on very substantial grounds.

The “Right of Way” may also be used against “Private Property” under Section 14 which could have an impact on public through forced acquisition of private property.

Under this section, Any facility provider may submit an application to the person owning the property to  seek right of way for telecommunication infrastructure under, over,
along, across, in or upon such property.

On receipt of an application from a facility provider, such person may enter into an agreement, specifying such consideration as mutually agreed.

In the event the person  does not provide the right of way requested, and the Central Government determines that it is necessary to do so in the public interest, it may, either by itself or through any other authority designated by the Central Government for this purpose, proceed to acquire the right of way for enabling the facility provider to establish, operate, maintain such telecommunication infrastructure, in the manner as may be prescribed. may enter into an agreement, specifying such consideration as mutually agreed.

It is very important to ensure that this provision is not misused and hence there should be an effective system for grievance redressal which does not appear to be available at present in the Act. Though Section 18 does recognize the need for dispute resolution, there is no clarity if individuals whose property is sought to be tress passed by the telecom companies would get access to proper compensation .

The act is heavily skewed towards the industry and may require some more balancing in favour of the public.

Naavi

The preliminary observations on the Bill is closed here. Further comments may be developed as required subsequently

Continued from the earlier article

One of the key elements of regulation is the “Spectrum”.

 This law adds a new “Asset Class” called Spectrum which is ” a range of frequency” of radio/electromagnetic waves.

Spectrum will be an exclusive asset of the Government and can be licensed.

The licensee will have the contractual rights of exploitation of the spectrum and this “Right” is having a value which should appear in their balance sheets.

If the licensing is for a period, the value should be depreciated over the period as a deferred expenditure.

The Government is recognizing “Re-farming” of the spectrum so that a licensed frequency range can be used for purposes other than for which it was earlier licensed. Government may also harmonize the frequency range for efficient use of the spectrum. (rearrangement of the frequency range). Government may also re-assign the spectrum allocation to improve efficiency.

Sharing, trading , leasing of the spectrum is also permitted under law.

However in case of insolvency the spectrum may revert to the Government under certain conditions of default.

All these provisions add a new dimension to valuation of intangible assets to which class Spectrum also belongs to. This is interesting and has extendibility to data valuation which is being promoted by the undersigned.

Naavi

Continued from previous article

The key purpose of the Telecom Bill is regulating the Telecom industry . Accordingly Chapter 3 covers Licensing, Registration, Authorization and Assignment.

The first point to be noted is the “Exclusive Privilege” created for the Government to provide tele communication services within India including setting up of the telecommunication network and use and assignment of spectrum.  The license will be subject to terms and conditions which becomes the basis of operation and determination of other obligations under the Act.

It is necessary to note that even possession of a wireless equipment requires authorization. Wireless equipment under the Act means

“any telecommunication equipment used or capable of use in wireless communication, including any wireless transmitter that is capable of use for broadcasting or emission of wireless communication”

Since the definition is broad and may cover even a wireless router and mobile, the Government needs to provide an exemption list while notifying the Act.

Similarly the possession of any equipment that can block tele communication is prohibited.

Possession of equipment that can pick “off the air telecommunication signals” also needs to be subject to strict licensing. Such equipment is used for surveillance by intelligence agencies and by unauthorized agencies.

An interesting provision is that

“Any entity which is granted a license under sub-clause (2) of Section 3, shall unequivocally identify the person to whom it provides services, through a verifiable mode of identification as may be prescribed.”

“The identity of a person sending a message using telecommunication services
shall be available to the user receiving such message, in such form as may be prescribed, unless specified otherwise by the Central Government.”

The above provisions should be read with the wide definition of telecommunication services which states

“telecommunication services” means service of any description (including broadcasting services, electronic mail, voice mail, voice, video and data communication services, audiotex services, videotex services, fixed and mobile services, internet and broadband services, satellite based communication services, internet based communication services, in-flight and maritime connectivity services, interpersonal communications services, machine to machine communication services, over-the-top (OTT) communication services) which is made available to users by telecommunication, and includes any other service that the Central Government may notify to be telecommunication services;

This means that in both E-Mail and Mobile services, the identity of the sender of the message should be available to the receiver. 

This will put an end to the menace of fake E-Mails and Fake Voice calls at least to a substantial extent.

We will wait and see how the Gmail or WhatsApp will respond. Presently they are using “Anonymization” as a right and using “Privacy” as a fig leaf to let criminals act through their platforms. This should stop and probably they will oppose this provision as they did when it was first proposed in PDPB 2019. Even the domain name registrars have the tendency to hide the identity of the registrants on the pretext of Privacy and facilitate frauds of phishing etc.

We welcome this provision whole heartedly. At the same time, in order to make “Privacy” available through “Pseudonymization”, we have proposed “Regulated Anonymity” proposed by Naavi way back in 2012. May be this should be considered with some modification now and TRAI should provide it as an option under the rules.

…to be continued

Naavi

Continued from the previous article

Continuing our discussion on the Draft Indian Telecom bill, let us discuss the rovisions regarding civil penalties under the Act.

Under Section 38, the Central Government may prescribe civil liabilities, including compensation payable by any person causing damage to telecommunication network or
telecommunication infrastructure, to the licensee or registered entity, as the case may
be, and the applicable penalties.

This section is the penalty that may be payable by a member  of public to the licensee for causing damage. One example would be when the cable network set up by a licensee is damaged either wilfully or by negligence by individuals or civic authorities like the road authorities, corporation authorities, electricity boards etc.

Otherwise the compensation if any payable to public by any service provider is to be covered under Section 33 for Spamming and Do Not Disturb violations. It appears that at present compensation payable to users for spamming etc or any damage caused to the subscribers say by radiation etc., is not fully addressed. It is left to be covered by other laws like IPC and perhaps by the upcoming amended ITA 2000 or data protection act.

It may be essential that the Government retains the ability to provide compensation to users by adding in Section 38  or under Section 33 so that instead of invoking compensation under ITA 2000 through an Adjudicator remedy can be in-built into this Act itself for any contravention.

The main part of the Act covers administration of the telecom industry and hence it addresses several issues of licensing formalities  and associated penalties for breach of licensing conditions.

Penalties  for breach of terms and conditions of a license are prescribed from “Written warning” in the case of non severe breaches to Rs 5 crore in respect of severe breaches.

The Act recommends use of ADR and intends to establish a suitable mechanism for mediation or arbitration or other forms of ADR.

The Central Government may also prescribe the procedure, the appropriate authority, the
appellate authority, and terms and conditions, including time period for resolution of
disputes, arising under the provisions of this chapter.

At present the TDSAT is the dispute resolution authority and it may continue with resolution before TDSAT being attempted through the ADR process.

…to be continued

Naavi

Continued from previous Article

Let us continue our discussion on the New Telecom Bill with the chapter on offences. The Act has listed the offences under a Schedule and provided the general aspects under Chapter 11.

The Scheduled list of offences have offences listed as “Cognizable” and “Non Cognizable” and all offences are “Bailable”. This provision over rides  Code of Criminal procedures. However no court can take cognizance of a non Cognizable offence except on a complaint made by the Central Government or the competent authority which may be notified by the Government. All offences shall only be tried by a Court not inferior to that of a Chief Metropolitan Magistrate or Chief Judicial Magistrate. Offences that are compoundable have also been identified in the schedule.

The liability for offences by companies can be extended to the employees who were responsible for the conduct  of the business.

The  list of offences are provided under Schedule 3.

While providing telecommunication service without a license is an offence punishable with imprisonment of 1 year, it is considered Cognizable and Non Compoundable. (fine upto Rs 50 lakhs)

Unauthorized access to a telecommunication network which could also qualify for an offence under ITA 2000 today again prescribes  an imprisonment of 1 year only though it is cognizable and non compoundable. (fine upto Rs 50 lakhs).

Wilful contravention that is detrimental to national security is another cognizable and non compoundable offence but with 3 years imprisonment and fine upto Rs 1 crore.

Possession or use of any equipment which can jam the telecom signals is an offence leading to 3 years imprisonment, cognizable and compoundable.

Wilful tampering of telecom equipment (which could even apply to cutting of Cable of a Cable TV supplier) could result in imprisonment of 1 year and would be a cognizable and compoundable offence.

Strangely “Causing Damage through negligence to telecommunication infrastructure or network” is listed for a fine of Rs 50 lakhs under “Offences” but without any imprisonment term.

Similarly, use by any person of a facility for which the supplier may not have license could lead to a fine of Rs one lakh but no imprisonment is prescribed.

Unlicensed possession of a wireless equipment could be a non cognizable and compoundable offence with only  a fine of Rs 50000/- for the first time and upto Rs 2 lakhs subsequently.

If a service provider impersonates a licensed entity, the offence would be punishable with 3 years imprisonment  and fine of Rs 50 lakhs. It would be cognizable and non compoundable.

Contravention of the provisions of Section 33 which covers spamming and violation of Donot Disturb provision could lead to a fine for  the first offence  upto Rs 50,000 and Rs 2 lakhs thereafter.  It would be non cognizable and compoundable.

Misrepresenting the identity availing a telecommunication service may be punished with an imprisonment upto one year and fine of Rs 50000/- with the offence being considered cognizable and compoundable.

In any other instance for which a specific penalty has not been provided, a fine upto Rs 25000/- may be imposed for the first time and Rs 50000/- thereafter.. It would be non cognizable and compoundable.

Thus we can observe that the description of offences in this Act differs from other Acts in certain respect and in some respects the punishment is less than what is applicable under ITA 2000 if we consider that access to a telecom equipment is equivalent to access to information residing there in.

Perhaps when the ITA 2000 is amended some of these changes like “Offence with fine only without imprisonment” may be included. Such contraventions go to the Magistrate Court as a criminal offence instead of the adjudication of a civil penalty. Whether this is advisable or not needs to be debated.

(To Be continued)

Naavi