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India, the Digital Battleground

India, the Digital Battleground
 François Godement
Special Advisor and Resident Senior Fellow - U.S. and Asia

If one had any doubt about the intensity and breadth of public policy debates in India, or about the centrality of the country for the future of the digital world, three simultaneous developments should prove that it is essential to follow the world’s largest data market. Let’s remember that the country has nearly 600 million internet users, who downloaded 12 billion apps in 2018, while the entire population now has an individual digital identity.

India’s Supreme Court cites Charles Dickens and goes on to censor the central government on its indefinite blockade of internet services in Kashmir. A two-year-old inception of a detailed Personal Data Protection Bill (PDPB) culminates in a parliamentary debate of both Houses. And an antitrust inquiry is launched against Amazon during the very visit to India by Jeff Bezos, who came promising billions to help small Indian shopkeepers and boost the export of more Indian products…

Each of these three events has its own dynamic and its own finality. Taken together, they suggest a shifting and unsettled balance between the Indian state, individuals and foreign companies. The Supreme Court judgment by a panel of three judges reflects a legal culture of checks and balances, heavily invested in British and in fact more often American case law. It positions internet communications as part of the right to free expression, as well as a key component of the economy and trade. It recognizes the central government’s argument on terrorism in the region, and it does not challenge directly the contention that the terrorist threat in India has cross-border characteristics. Nor does it take exception, of course, with the wide restrictions to free expression provided by article 19 of India’s Constitution.

But the Court makes several observations: the orders of internet shutdown have neither been fully published nor justified by facts that could be challenged in court; there is no proportionality between alleged threats and this indefinite and blanket closure. It therefore mandates the immediate restoration of essential services and compliance with its requirements for publication of the actual order, justification and proportionality.

The battle is not only revolving around digital services, but on freedom of information and the means that can be used in what the Court itself acknowledges is a "war on terrorism".

So far, the government has only implemented literally and formally the Court’s judgment. It has restored access to 153 websites, none of which has news content, and leaves some localities entirely out.The battle is not only revolving around digital services, but on freedom of information and the means that can be used in what the Court itself acknowledges is a "war on terrorism". But overall, the Court is limiting a trend to heavy-handed government action, it is not reversing it.

The submission to Parliament of the final draft of the long-awaited Personal Data Protection Bill shows that other concerns regarding digital rights have been taken on board after two years of public debate. The government takes a step back on the issue of data sovereignty and on the definition of critical and sensitive data subject to oversight. The PDPB has actually moved even closer to Europe’s GDPR on issues such as the right to erasure, anonymization, and requirements for social media (coming under the heading of "significant data fiduciaries").

But the 56 pages text has several important grey zones that could still allow for much more control by central authorities: it will be interesting to see whether both Houses – where Modi’s Bharatiya Janata Party (BJP) has a comfortable majority since June 2019 – seek clarification or rubberstamp the government’s text. Non-critical and non-sensitive data (including passwords) are spared any requirement for localization. Sensitive data (including financial data) can be transferred under conditions that include "explicit consent". Critical data can be transferred if adequacy of standards is recognized with another country or if "vital interests" are at stake.The other side of the coin is that the government has full freedom to define what is "critical" data. But another issue remains: there are large powers conferred to the future Data Protection Authority (DPA). It will receive the mission to interpret the law, and to define many of its terms. This quasi-legal organization is staffed and budgeted by the government (or by states as is the case for local DPAs). An Appellate Tribunal is provided, but its members are nominated by the government (only among former Supreme Court Justices for its Chairperson). In other words, there was a balancing act.

The final data protection bill draft has conceded some ground to the adversaries of data localization and has updated and improved the protection of individuals. But it has also maintained the discretionary interpretation and new rules that may flow from the Data Protection Authority.

The other side of the coin is that the government has full freedom to define what is "critical" data.

Unlike China, which essentially operates a closed internet with a one-way international access for authorities, India has big stakes in free and open data flows: digital data treatment is a key service activity. Its two largest partners, the United States and the European Union, will prioritize different perspectives: data localization is an essential concern of American platforms; rule of law is an obligatory feature of the EU’s adequacy agreements such as has been concluded with Japan.

A third development is the opening by India’s Competition Commission of an enquiry into Amazon (and Flipkart, now a Walmart subsidiary) on the first day of a much-publicized visit by Jeff Bezos. While the enquiry falls short of accusations of a dominant position, it challenges unfair trade practices and discrimination among partners, from discounts to preferred brand launches and choices between mobile phone sellers.

Without doubt, the move is related to domestic politics. The Confederation of All-India Traders has 60 million members and has heavily supported Narendra Modi. At the other end of India’s economy, businessmen such as Mukesh Ambani, also a Modi supporter now in trouble over the financing of his mushrooming phone network, harbor ambitions for e-commerce: they look at China, which has nurtured its e-commerce giants and largely excluded foreign competitors. We are clearly not there in India – where large American platforms have the same lead as in Europe. This leads to questions, and those asked by the Competition Commission are indeed justifiable.

Digital India is one of the world’s important on-going stories. It is among the most advanced nations in digital governance and inclusiveness. It has many large and small entrepreneurs ready to revolutionize the economy and society. The three issues outlined above also prove every day the subcontinent’s search for its own solutions between several potential models – European, American and Chinese.



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