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The PDPA contained 112 sections divided into 15 chapters. The new version PDPA 2019 contains 98 sections and is structured as follows:

It is important to note that the chapter on “Transition” that set a time line for implementation is no longer there. This could mean that the Act may be effective as soon as it is passed into law though DPA may not be in place.

The Grounds of processing which were contained in three chapters earlier has now been condensed into one chapter.

Naavi

The first thing we notice is that the PDPA 2019 (draft) contains 98 sections instead of 112 sections in the earlier Bill and also omits one schedule regarding the amendment to RTI.

The change regarding the data localization could be first looked at since this has been a point of concern of the industry.

Chapter VII of PDPA 2019 has two sections 33 and 34 which refer to Restriction on transfer of personal data outside India.

According to section 33:

33. (1) Subject to the conditions in sub-section (1) of section 34, the sensitive personal   20 data may be transferred outside India, but such sensitive personal data shall continue to be stored in India.

(2) The critical personal data shall only be processed in India.

Explanation.—For the purposes of sub-section (2), the expression “critical personal data” means such personal data as may be notified by the Central Government to be the    critical personal data.

This means that the provision of one copy being stored in India continues for sensitive personal data and has been removed for Non Sensitive personal data. Strict restriction for non transfer applies to critical personal data as and when notified.

Under Section 34 the transfer of sensitive personal data is subject to the following provisions such as explicit consent and intra group schemes approved by the DPA and on adequacy principle,medical emergencies etc.

34. (1) The sensitive personal data may only be transferred outside India for the purpose of processing, when explicit consent is given by the data principal for such transfer, and where—

(a) the transfer is made pursuant to a contract or intra-group scheme approved 30 by the Authority:

Provided that such contract or intra-group scheme shall not be approved, unless it makes the provisions for—

(i) effective protection of the rights of the data principal under this Act, including in relation to further transfer to any other person; and 

(ii) liability of the data fiduciary for harm caused due to non-compliance of the provisions of such contract or intra-group scheme by such transfer; or

(b) the Central Government, after consultation with the Authority, has allowed the transfer to a country or, such entity or class of entity in a country or, an international organisation on the basis of its finding that

(i) such sensitive personal data shall be subject to an adequate level of protection, having regard to the applicable laws and international agreements; and

(ii) such transfer shall not prejudicially affect the enforcement of relevant laws by authorities with appropriate jurisdiction:

Provided that any finding under this clause shall be reviewed periodically in such manner as may be prescribed;

(c) the Authority has allowed transfer of any sensitive personal data or class of sensitive personal data necessary for any specific purpose.

(2) Notwithstanding anything contained in sub-section (2) of section 33, any critical personal data may be transferred outside India, only where such transfer is—

(a) to a person or entity engaged in the provision of health services or emergency services where such transfer is necessary for prompt action under section 12; or

(b) to a country or, any entity or class of entity in a country or, to an international organisation, where the Central Government has deemed such transfer to be permissible under clause (b) of sub-section (1) and where such transfer in the opinion of the Central Government does not prejudicially affect the security and strategic interest of the State.

(3) Any transfer under clause (a) of sub-section (2) shall be notified to the Authority within such period as may be specified by regulations

The definition of sensitive personal data has also been slightly revised and the current list is as follows:

“sensitive personal data” means such personal data, which may, reveal, be related to, or constitute—

(i) financial data;

(ii)  health data;

(iii) official identifier;

(iv) sex life;

(v) sexual orientation;

(vi) biometric data;

(vii)  genetic data;

(viii)  transgender status;

(ix)  intersex status;

(x) caste or tribe;

(xi) religious or political belief or affiliation; or

(xii) any other data categorised as sensitive personal data under section 15.

Explanation.— For the purposes of this clause, the expressions,—

(a) “intersex status” means the condition of a data principal who is—

(i) a combination of female or male;

(ii) neither wholly female nor wholly male; or

(iii) neither female nor male;

(b) “transgender status” means the condition of a data principal whose sense of gender does not match with the gender assigned to that data principal at birth, whether or not they have undergone sex reassignment surgery, hormone therapy, laser therapy, or any other similar medical procedure;

It may be noted that “passwords” is no longer considered “Sensitive”. Implication of this needs to be debated since any misuse of “passwords” is an offence under Section 66C/66D of ITA 2000.

The amended provisions therefore has given up the data localization for non sensitive personal data and must be a big relief to most companies.  Social media which carry political discussions as well as names which are associated with “caste” or “Tribe” may be considered as “Sensitive” and hence fall under the restrictive category.

Naavi

A version of the PDPA which is slightly different from the earlier version is now available and though not confirmed, could be the bill which will be presented in the Parliament in the next few days.

A copy of the bill is available here.

Naavi

It is reported that the Union Cabinet has approved a version of the Personal Data Protection Bill to be tabled in the Parliament. It is expected that the Bill will be tabled any time.

The industry observers are waiting eagerly to see if the “Anti Data Localization Lobby” has been able to persuade the Government to drop the earlier proposition. This was the most vocal opposition to the earlier version. On the other hand a lobby did develop highlighting the “Data Sovereignty” principle. We need to see if the Government has yielded to the lobby.

There are some unconfirmed reports that some provisions of the Intermediary Guidelines that was issued as a change in the notification under ITA 2000 could be also included in some form in the Bill. We need to wait if this is done.

One of the provisions that we eagerly await is regarding the “Non Bailable” nature of the offences which perhaps need to be changed into “Bailable”. The Data localization issue can be handled in due course since the Act anyway has the provision to set up a separate date for implementation of this provision.

Let us wait and see whether the wishes of the Anti Data Localization lobby have been accommodated.

It would be interesting to see how the Opposition would react to the Bill. Will they oppose it for the sake of opposition? or go with the tide to bring a formal data protection regime in India?

Naavi’s Cyber Law College would be launching its new Certificate Course on PDPA from this Saturday the 7th December 2019 and would be the first such formal course to incorporate the new version of the Bill. It is expected that the Bill gets passed at the next session in February and the DPA would be in place by April 2020.

Naavi

Justice Sri B N Srikrishna drafted the Personal Data Protection Act of India is now in consideration for the Parliament to be passed into an Act.

In the meantime, in a big boost to the Indian version of the privacy law, a bill has been proposed in US for a Federal Privacy Law which has taken one of the most defining provisions of the Indian law into its recommendations.

This law is titled COPRA (Consumer Online Privacy Rights Act)

Today I came across an article titled “A New US Federal Privacy Bill-Is it GDPR/CCPA -like?”

I however felt that it should have also added “Is it PDPA (India)  like?” because of one of the significant new “Right” that it proposes to provide the data subjects.

For example COPRA suggests recognition of a Right that imposes 

“A Duty of loyalty by covered entities and specifically a duty to avoid deceptive practices”

This is exactly same as what Indian PDPA proposes under Section 4 stating

DATA PROTECTION OBLIGATIONS

4. Fair and reasonable processing.—

Any person processing personal data owes a duty to the data principal to process such personal data in a fair and reasonable manner that respects the privacy of the data principal.

PDPA further fortifies its intentions by calling the Data Subject the “Data Principal” and the Data Controller the “Data Fiduciary” making the Data Fiduciary take on trusteeship role which automatically incorporates the “No Deception” requirement proposed in the US law.

In a way this removes a huge perception hurdle for Indian privacy and data protection analysts to accept the new concept that “Data Fiduciary is a Trustee” because it is not only Justice Srikrishna who is saying so and not only Naavi who is evangelizing this interpretation but it is the US who is saying it.!

Naavi

In all information security problems, we consider “Security at Data Level” involving “Encryption” as a very important tool.

When data is at rest, it is possible to store it in encrypted form so that even if access is compromised,  the intruder cannot make use of the data. If the encryption is strong enough, the data can be practically considered immune to any adverse impact. Laws such as HIPAA as well as other laws, consider loss of encrypted data as not contributing to data breach.

Similarly, when data is under transmission, it is encrypted so that any evesdropper would be prevented from taking advantage of the interception.

“Encryption” is essentially a mathematical operation that works on “Data” which is a “Number expressed in Binary” and processes it as a variable in an encryption algorithm to produce a new number which is the encrypted data stream. The “Decryption” is a reverse mathematical operation that generates the original binary stream that can be read back as the original data.

Though “Symmetric Encryption” which uses the same key for encryption and decryption is used in most instances asymmetric encryption using different encryption and decryption keys  is preferred in some applications. In this system there is no need to transmit the encryption key to the intended person to whom an encrypted message is sent and it avoids the risk of compromise in the transmission of keys. This system can also be used for encrypting data at rest as well and is considered the legally approved method for electronic signature system in India.

If the encryption algorithm is strong and there is a good key management system to prevent compromise of the keys and avoid locking out of the data through loss of keys, the two key system is a good solution to many of the security problems. Since the resource utilization could create some usability issues, in some instances a combination of symmetric and asymmetric encryption may be used.

However, the Data Processors who are concerned about “Privacy” have often wondered how to cover the risk of data breach while the data is “Under Processing”.  Since hackers often get into the network of the data processors and many data breaches occur with the involvement of the employees themselves, the breach of data during its unencrypted state during processing phase has been a matter of concern to data security professionals.

With the increasing use of cloud storage and processing over the cloud, the risk of unencrypted data being handed over to the cloud operator was always a concern.

It appears that technology has now been developing to solve this difficulty in the form of “Homomorphic Encryption”.

Homomorphic encryption is a form of encryption that allow specific types of computation to be executed on cipher texts and obtain an encrypted result that is also in cipher text form  but  matches the results of the computation of the plain text and its encryption.

The detailed technology needs to be discussed separately. But the possibility of processing of encrypted information without decryption will be extremely interesting from the data protection view point.

At the same time attackers may use the same technology to corrupt the encrypted data as well and we need to develop security against attacks through homomorphic encryption used as a hacker’s tool.

More views are welcome.

Naavi