Centre for Internet and Society

New Approaches to Information Privacy – Revisiting the Purpose Limitation Principle

amber — 2016-11-09T13:54:28Z

Article on Aadhaar throwing light on privacy and data protection.

This was published in Digital Policy Portal on July 13, 2016.

Introduction

Last year, Mukul Rohatgi, the Attorney General of India, called into question existing jurisprudence of the last 50 years on the constitutional validity of the right to privacy.¹ Mohatgi was rebutting the arguments on privacy made against Aadhaar, the unique identity project initiated and implemented in the country without any legislative mandate.² The question of the right to privacy becomes all the more relevant in the context of events over the last few years—among them, the significant rise in data collection by the state through various e-governance schemes,³ systematic access to personal data by various wings of the state through a host of surveillance and law enforcement initiatives launched in the last decade,⁴ the multifold increase in the number of Indians online, and the ubiquitous collection of personal data by private parties.⁵

These developments have led to a call for a comprehensive privacy legislation in India and the adoption of the National Privacy Principles as laid down by the Expert Committee led by Justice AP Shah.⁶ There are privacy-protection legislation currently in place such as the Information Technology Act, 2000 (IT Act), which was enacted to govern digital content and communication and provide legal recognition to electronic transactions. This legislation has provisions that can safeguard—and dilute—online privacy. At the heart of the data protection provisions in the IT Act lies section 43A and the rules framed under it, i.e., Reasonable security practices and procedures and sensitive personal data information.⁷Section 43A mandates that body corporates who receive, possess, store, deal, or handle any personal data to implement and maintain ‘reasonable security practices’, failing which, they are held liable to compensate those affected. Rules drafted under this provision also mandated a number of data protection obligations on corporations such the need to seek consent before collection, specifying the purposes of data collection, and restricting the use of data to such purposes only. There have been questions raised about the validity of the Section 43A Rules as they seek to do much more than mandate in the parent provisions, Section 43A— requiring entities to maintain reasonable security practices.

Privacy as control?

Even setting aside the issue of legal validity, the kind of data protection framework envisioned by Section 43A rules is proving to be outdated in the context of how data is now being collected and processed. The focus of Section 43 A Rules—as well as that of draft privacy legislations in India⁸—is based on the idea of individual control. Most apt is Alan Westin’s definition of privacy: “the claim of individuals, groups, or institutions to determine for themselves when, how, and to what extent information about them is communicated to other.”⁹ Westin and his followers rely on the normative idea of “informational self- determination”, the notion of a pure, disembodied, and atomistic self, capable of making rational and isolated choices in order to assert complete control over personal information. More and more this has proved to be a fiction especially in a networked society.

Much before the need for governance of information technologies had reached a critical mass in India, Western countries were already dealing with the implications of the use of these technologies on personal data. In 1973, the US Department of Health, Education and Welfare appointed a committee to address this issue, leading to a report called ‘Records, Computers and Rights of Citizens.’¹⁰ The Committee’s mandate was to “explore the impact of computers on record keeping about individuals and, in addition, to inquire into, and make recommendations regarding, the use of the Social Security number.” The Report articulated five principles which were to be the basis of fair information practices: transparency; use limitation; access and correction; data quality; and security. Building upon these principles, the Committee of Ministers of the Organization for Economic Cooperation and Development (OECD) arrived at the Guidelines on the Protection of Privacy and Transborder Flows of Personal Data in 1980.¹¹ These principles— Collection Limitation, Data Quality, Purpose Specification, Use Limitation, Security Safeguards, Openness, Individual Participation and Accountability—are what inform most data protection regulations today including the APEC Framework, the EU Data Protection Directive, and the Section 43A Rules and Justice AP Shah Principles in India.

Fred Cate describes the import of these privacy regimes as such:

“All of these data protection instruments reflect the same approach: tell individuals what data you wish to collect or use, give them a choice, grant them access, secure those data with appropriate technologies and procedures, and be subject to third-party enforcement if you fail to comply with these requirements or individuals’ expressed preferences”¹²

This is in line with Alan Westin’s idea of privacy exercised through individual control. Therefore the focus of these principles is on empowering the individuals to exercise choice, but not on protecting individuals from harmful or unnecessary practices of data collection and processing. The author of this article has earlier written¹³ about the sheer inefficacy of this framework which places the responsibility on individuals. Other scholars like Daniel Solove,¹⁴ Jonathan Obar¹⁵ and Fred Cate¹⁶ have also written about the failure of traditional data protection practices of notice and consent. While these essays dealt with the privacy principles of choice and informed consent, this paper will focus on the principles of purpose limitation.

Purpose Limitation and Impact of Big Data

The principles of purpose limitation or purpose specification seeks to ensure the following four objectives:

Personal information collected and processed should be adequate and relevant to the purposes for which they are processed.
The entities collect, process, disclose, make available, or otherwise use personal information only for the stated purposes.
In case of change in purpose, the data’s subject needs to be informed and their consent has to be obtained.
After personal information has been used in accordance with the identified purpose, it has to be destroyed as per the identified procedures.

The purpose limitation along with the data minimisation principle—which requires that no more data may be processed than is necessary for the stated purpose—aim to limit the use of data to what is agreed to by the data subject. These principles are in direct conflict with new technology which relies on ubiquitous collection and indiscriminate uses of data. The main import of Big Data technologies on the inherent value in data which can be harvested not by the primary purposes of data collection but through various secondary purposes which involve processing of the data repeatedly.¹⁷Further, instead to destroying the data when its purpose has been achieved, the intent is to retain as much data as possible for secondary uses. Importantly, as these secondary uses are of an inherently unanticipated nature, it becomes impossible to account for it at the stage of collection and providing the choice to the data subject.

Followers of the discourse on Big Data would be well aware of its potential impacts on privacy. De-identification techniques to protect the identities of individuals in dataset face a threat from an increase in the amount of data available either publicly or otherwise to a party seeking to reverse-engineer an anonymised dataset to re-identify individuals. ¹⁸ Further, Big Data analytics promise to find patterns and connections that can contribute to the knowledge available to the public to make decisions. What is also likely is that it will lead to revealing insights about people that they would have preferred to keep private.¹⁹In turn, as people become more aware of being constantly profiled by their actions, they will self-regulate and ‘discipline’ their behaviour. This can lead to a chilling effect.²⁰ Meanwhile, Big Data is also fuelling an industry that incentivises businesses to collect more data, as it has a high and growing monetary value. However, Big Data also promises a completely new kind of knowledge that can prove to be revolutionary in fields as diverse as medicine, disaster-management, governance, agriculture, transport, service delivery, and decision-making.²¹ As long as there is a sufficiently large and diverse amount of data, there could be invaluable insights locked in it, accessing which can provide solutions to a number of problems. In light of this, it is important to consider what kind of regulatory framework is most suitable which could facilitate some of the promised benefits of Big Data and at the same time mitigate its potential harm. This, coupled with the fact that the existing data protection principles have, by most accounts, run their course, makes the examination of alternative frameworks even more important. This article will examine some alternate proposals made to the existing framework of purpose limitation below.

Harms-based approach

Some scholars like Fred Cate²² and Daniel Solove²³ have argued that there is a need for the primary focus of data protection law to move from control at the stage of data collection to actual use cases. In his article on the failure of Fair Information Practice Principles,²⁴Cate puts forth a proposal for ‘Consumer Privacy Protection Principles.’ Cate envisions a more interventionist role of the data protection authorities by regulating information flows when required, in order to protect individuals from risky or harmful uses of information. Cate’s attempt is to extend the principles of consumer protection law of prevention and remedy of harms.

In a re-examination of the OECD Privacy Principles, Cate and Viktor Mayer Schöemberger attempt to discard the use of personal data to only purposes specified. They felt that restricting the use of personal to only specified purposes could significantly threaten various research and beneficial uses of Big Data. Instead of articulating a positive obligations of what personal data collected could be used for, they attempt to arrive at a negative obligation of use-cases prevented by law. Their working definition of the Use specification principle broaden the scope of use cases by only preventing use of data “if the use is fraudulent, unlawful, deceptive or discriminatory; society has deemed the use inappropriate through a standard of unfairness; the use is likely to cause unjustified harm to the individual; or the use is over the well-founded objection of the individual, unless necessary to serve an over-riding public interest, or unless required by law.”²⁵

While most standards in the above definition have established understanding in jurisprudence, the concept of unjustifiable harm is what we are interested in. Any theory of harms-based approach goes back to John Stuart Mill’s dictum that the only justifiable purpose to exert power over the will of an individual is to prevent harm to others. Therefore, any regulation that seeks to control or prevent autonomy of individuals (in this case, the ability of individuals to allow data collectors to use their personal data, and the ability of data collectors to do so, without any limitation) must clearly demonstrate the harm to the individuals in question.

Fred Cate articulates the following steps to identify tangible harm and respond to its presence:²⁶

Focus on Use — Actual use of the data should be considered, not mere possession. The assumption is that the collection, possession, or transfer of information do not significantly harm people, rather it is the use of information following such collection, possession, or transfer.
Proportionality — Any regulatory measure must be proportional to the likelihood and severity of the harm identified.
Per se Harmful Uses — Uses which are always harmful must be prohibited by law
Per se not Harmful Uses — If uses can be considered inherently not harmful, they should not be regulated.
Sensitive Uses — In case where the uses are not per se harmful or not harmful, individual consent must be sought for using that data for those purposes.

The proposal by Cate argues for what is called a ‘use based system’, which is extremely popular with American scholars. Under this system, data collection itself is not subject to restrictions; rather, only the use of data is regulated. This argument has great appeal for both businesses who can reduce their overheads significantly if consent obligations are done away with as long as they use the data in ways which are not harmful, as well as critics of the current data protection framework which relies on informed consent. Lokke Moerel explains the philosophy of ‘harms based approach’ or ‘use based system’ in United States by juxtaposing it against the ‘rights based approach’ in Europe.²⁷ In Europe, rights of individuals with regard to processing of their personal data is a fundamental human right and therefore, a precautionary principle is followed with much greater top-down control upon data collection. However, in the United States, there is a far greater reliance on market mechanisms and self-regulating organisations to check inappropriate processing activities, and government intervention is limited to cases where a clear harm is demonstrable.²⁸

Continuing research by the Centre for Information Policy Leadership under its Privacy Risk Framework Project looks at a system of articulating what harms and risks arising from use of collected data. They have arrived a matrix of threats and harms. Threats are categorised as —a) inappropriate use of personal information and b) personal information in the wrong hands. More importantly for our purposes, harms are divided into: a) tangible harms which are physical or economic in nature (bodily harm, loss of liberty, damage to earning power and economic interests); b) intangible harms which can be demonstrated (chilling effects, reputational harm, detriment from surveillance, discrimination and intrusion into private life); and c) societal harm (damage to democratic institutions and loss of social trust).²⁹For any harms-based system, a matrix like above needs to emerge clearly so that regulation can focus on mitigating practices leading to the harms.

Legitimate interests

Lokke Moerel and Corien Prins, in their article “Privacy for Homo Digitalis – Proposal for a new regulatory framework for data protection in the light of Big Data and Internet of Things”³⁰ use the ideal of responsive regulation which considers empirically observable practices and institutions while determining the regulation and enforcement required. They state that current data protection frameworks—which rely on mandating some principles of how data has to be processed—is exercised through merely procedural notification and consent requirements. Further, Moerel and Prins feel that data protection law cannot only involve a consideration of individual interest but also needs to take into account collective interest. Therefore, the test must be a broader assessment than merely the purpose limitation articulating the interests of the parties directly involved, but whether a legitimate interest is achieved.

Legitimate interest has been put forth as an alternative to the purpose limitation. Legitimate is not a new concept and has been a part of the EU Data Protection Directive and also finds a place in the new General Data Protection Regulation. Article 7 (f) of the EU Directive³¹ provided for legitimate interest balanced against the interests or fundamental rights and freedoms of the data subject as the last justifiable reason for use of data. Due to confusion in its interpretation, the Article 29 Working Party, in 2014,³²looked into the role of legitimate interest and arrived at the following factors to determine the presence of a legitimate interest— a) the status of the individual (employee, consumer, patient) and the controller (employer, company in a dominant position, healthcare service); b) the circumstances surrounding the data processing (contract relationship of data subject and processor); c) the legitimate expectations of the individual.

Federico Ferretti has criticised the legitimate interest principle as vague and ambiguous. The balancing of legitimate interest in using the data against fundamental rights and freedoms of the data subject gives the data controllers some degree of flexibility in determining whether data may be processed; however, this also reduces the legal certainty that data subject have of their data not being used for purposes they have not agreed to.³³However, it is this paper’s contention that it is not the intent of the legitimate interest criteria but the lack of consensus on its application which creates an ambiguity. Moerel and Prins articulate a test for using legitimate interest which is cognizant of the need to use data for the purpose of Big Data processing, as well as ensuring that the rights of data subjects are not harmed.

As demonstrated earlier, the processing of data and its underlying purposes have become exceedingly complex and the conventional tool to describe these processes ‘privacy notices’ are too lengthy, too complex and too profuse in numbers to have any meaningful impact.³⁴The idea of information self-determination, as contemplated by Westin in American jurisprudence, is not achieved under the current framework. Moerel and Prins recommend five factors³⁵ as relevant in determining the legitimate interest. Of the five, the following three are relevant to the present discussion:

Collective Interest — A cost-benefit analysis should be conducted, which examines the implications for privacy for the data subjects as well as the society, as a whole.
The nature of the data — Rather than having specific categories of data, the nature of data needs to be assessed contextually to determine legitimate interest.
Contractual relationship and consent not independent grounds — This test has two parts. First, in case of contractual relationship between data subject and data controller: the more specific the contractual relationship, the more restrictions apply to the use of the data. Second, consent does not function as a separate principle which, once satisfied, need not be revisited. The nature of the consent (opportunities made available to data subject, opt in/opt out, and others) will continue to play a role in determining legitimate interest.

Conclusion

Replacing the purpose limitation principles with a use-based system as articulated above poses the danger of allowing governments and the private sector to carry out indiscriminate data collection under the blanket guise that any and all data may be of some use in the future. The harms-based approach has many merits and there is a stark need for more use of risk assessments techniques and privacy impact assessments in data governance. However, it is important that it merely adds to the existing controls imposed at data collection, and not replace them in their entirety. On the other hand, the legitimate interests principle, especially as put forth by Moerel and Prins, is more cognizant of the different factors at play — the inefficacy of existing purpose limitation principles, the need for businesses to use data for purposes unidentified at the stage of collection, and the need to ensure that it is not misused for indiscriminate collection and purposes. However, it also poses a much heavier burden on data controllers to take into account various factors before determining legitimate interest. If legitimate interest has to emerge as a realistic alternative to purpose limitation, there needs to be greater clarity on how data controllers must apply this principle.

Endnotes

Prachi Shrivastava, “Privacy not a fundamental right, argues Mukul Rohatgi for Govt as Govt affidavit says otherwise,” Legally India, Jyly 23, 2015, http://www.legallyindia.com/Constitutional-law/privacy-not-a-fundamental-right-argues-mukul-rohatgi-for-govt-as-govt-affidavit-says-otherwise.
Rebecca Bowe, “Growing Mistrust of India’s Biometric ID Scheme,” Electronic Frontier Foundation, May 4, 2012, https://www.eff.org/deeplinks/2012/05/growing-mistrust-india-biometric-id-scheme.
Lisa Hayes, “Digital India’s Impact on Privacy: Aadhaar numbers, biometrics, and more,” Centre for Democracy and Technology, January 20, 2015, https://cdt.org/blog/digital-indias-impact-on-privacy-aadhaar-numbers-biometrics-and-more/.
“India’s Surveillance State,” Software Freedom Law Centre, http://sflc.in/indias-surveillance-state-our-report-on-communications-surveillance-in-india/.
“Internet Privacy in India,” Centre for Internet and Society, http://cis-india.org/telecom/knowledge-repository-on-internet-access/internet-privacy-in-india.
Vivek Pai, “Indian Government says it is still drafting privacy law, but doesn’t give timelines,” Medianama, May 4, 2016, http://www.medianama.com/2016/05/223-government-privacy-draft-policy/.
Information Technology (Intermediaries Guidelines) Rules, 2011,
http://deity.gov.in/sites/upload_files/dit/files/GSR314E_10511%281%29.pdf.
Discussion Points for the Meeting to be taken by Home Secretary at 2:30 pm on 7-10-11 to discuss the drat Privacy Bill, http://cis-india.org/internet-governance/draft-bill-on-right-to-privacy.
Alan Westin, Privacy and Freedom (New York: Atheneum, 2015).
US Secretary’s Advisory Committee on Automated Personal Data Systems, Records, Computers and the Rights of Citizens, http://www.justice.gov/opcl/docs/rec-com-rights.pdf.
OECD Guidelines on the Protection of Privacy and Transborder Flows of Personal Data, http://www.oecd.org/sti/ieconomy/oecdguidelinesontheprotectionofprivacyandtransborderflowsofpersonaldata.htm
Fred Cate, “The Failure of Information Practice Principles,” in Consumer Protection in the Age of the Information Economy, ed. Jane K. Winn (Burlington: Aldershot, Hants, England, 2006) http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1156972.
Amber Sinha and Scott Mason, “A Critique of Consent in Informational Privacy,” Centre for Internet and Society, January 11, 2016, http://cis-india.org/internet-governance/blog/a-critique-of-consent-in-information-privacy.
Daniel Solove, “Privacy self-management and consent dilemma,” Harvard Law Review 126, (2013): 1880.
Jonathan Obar, “Big Data and the Phantom Public: Walter Lippmann and the fallacy of data privacy self management,” Big Data and Society 2(2), (2015), doi: 10.1177/2053951715608876.
Supra Note 12.
Supra Note 14.
Paul Ohm, “Broken Promises of Privacy: Responding to the Surprising Failure of Anonymization” available at http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1450006; Arvind Narayanan and Vitaly Shmatikov, “Robust De-anonymization of Large Sparse Datasets” available at https://www.cs.utexas.edu/~shmat/shmat_oak08netflix.pdf.
D. Hirsch, “That’s Unfair! Or is it? Big Data, Discrimination and the FTC’s Unfairness Authority,” Kentucky Law Journal, Vol. 103, available at: http://www.kentuckylawjournal.org/wp-content/uploads/2015/02/103KyLJ345.pdf
A Marthews and C Tucker, “Government Surveillance and Internet Search Behavior”, available at http://ssrn.com/abstract=2412564; Danah Boyd and Kate Crawford, “Critical Questions for Big Data: Provocations for a cultural, technological, and scholarly phenomenon”, Information, Communication & Society, Vol. 15, Issue 5, (2012).
Scott Mason, “Benefits and Harms of Big Data”, Centre for Internet and Society, available at http://cis-india.org/internet-governance/blog/benefits-and-harms-of-big-data#_ftn37.
Cate, “The Failure of Information Practice Principles.”
Solove, “Privacy self-management and consent dilemma,” 1882.
Cate, “The Failure of Information Practice Principles.”
Fred Cate and Viktor Schoenberger, “Notice and Consent in a world of Big Data,” International Data Privacy Law 3(2), (2013): 69.
Solove, “Privacy self-management and consent dilemma,” 1883.
Lokke Moerel, “Netherlands: Big Data Protection: How To Make The Draft EU Regulation On Data Protection Future Proof”, Mondaq, March 11. 2014, http://www.mondaq.com/x/298416/data+protection/Big+Data+Protection+How+To+Make+The+Dra%20ft+EU+Regulation+On+Data+Protection+Future+Proof%20al%20Lecture.
Moerel, “Netherlands: Big Data Protection.”
Centre for Information Policy Leadership, “A Risk-based Approach to Privacy: Improving Effectiveness in Practice,” Hunton and Williams LLP, June 19, 2014, https://www.informationpolicycentre.com/uploads/5/7/1/0/57104281/white_paper_1-a_risk_based_approach_to_privacy_improving_effectiveness_in_practice.pdf.
Lokke Moerel and Corien Prins, “Privacy for Homo Digitalis: Proposal for a new regulatory framework for data protection in the light of Big Data and Internet of Things”, Social Science Research Network, May 25, 2016, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2784123.
EU Directive 95/46/EC – The Data Protection Directive, https://www.dataprotection.ie/docs/EU-Directive-95-46-EC-Chapter-2/93.htm.
Article 29 Data Protection Working Party, “Opinion 06/2014 on the notion of legitimate interests of the data controller under Article 7 of Directive 95/46/EC,” http://ec.europa.eu/justice/data-protection/article-29/documentation/opinion-recommendation/files/2014/wp217_en.pdf.
Frederico Ferretti, “Data protection and the legitimate interest of data controllers: Much ado about nothing or the winter of rights?,” Common Market Law Review 51(2014): 1-26. http://bura.brunel.ac.uk/bitstream/2438/9724/1/Fulltext.pdf.
Sinha and Mason, “A Critique of Consent in Informational Privacy.”
Moerel and Prins, “Privacy for Homo Digitalis.”

For more details visit https://cis-india.org/internet-governance/blog/digital-policy-portal-july-13-2016-new-approaches-to-information-privacy-revisiting-the-purpose-limitation-principle

Trans Pacific Partnership and Digital 2 Dozen: Implications for Data Protection and Digital Privacy

Shubhangi Heda — 2016-07-12T07:56:24Z

In this essay, Shubhangi Heda explores the concerns related to data protection and digital privacy under the Trans Pacific Partnership (TPP) agreement signed recently between United States of America and eleven countries located around the pacific ocean region, across South America, Australia, and Asia. TPP is a free trade agreement (FTA) that emphasises, among other things, the need for liberalising global digital economy. The essay also analyses the critical document titled ‘Digital 2 Dozen’ (D2D), which compiles the key action items within TPP addressing liberalisation of digital economy, and sets up the relevant goals for the member nations.

1. Introduction

2. Analysis of TPP and D2D

2.1. Trans Pacific Partnership (TPP)

2.2. Digital 2 Dozen (D2D)

3. Major Criticisms of the Digital Agenda of TPP

3.1. Data Protection

3.2. Digital Privacy

4. Implications of TPP for RCEP

5. Implications of TPP in the Context of EU Safe Harbour Judgement

6. Implications of TPP for India after US-India Cyber Relationship Agreement

7. Conclusion

8. Endnotes

9. Author Profile

1. Introduction

This essay explores the concerns related to data protection and digital privacy under the Trans Pacific Partnership (TPP) agreement signed recently between United States of America and eleven countries located around the pacific ocean region, across South America, Australia, and Asia [1]. TPP is a free trade agreement (FTA) that emphasises, among other things, the need for liberalising global digital economy. The essay also analyses the critical document titled ‘Digital 2 Dozen’ (D2D), which compiles the key action items within TPP addressing liberalisation of digital economy, and sets up the relevant goals for the member nations. TPP requires the member countries to facilitate unhindered digital data flow across nations, for commercial and governmental purposes, which evidently have major implications for national and regional data protection and privacy regimes. These implications must also be seen in the context the recent judgement by the EU Court of Justice against the validity of the EU-USA data transfer agreement of 2000. Further, the essay discusses the potential impacts that TPP/D2D might have on India, in the context of the ongoing USA-India Cyber Relationship dialogue. If the privacy concerns are not raised right now TPP might act as a model framework for future FTAs which will fail to encompass proper data protection and digital privacy regime within it.

2. Analysis of TPP and D2D

2.1. Trans Pacific Partnership (TPP)

Trans Pacific Partnership (TPP) is a large multi-partner free trade agreement amongst twelve Asia-Pacific countries, which is closely led by geo-political and economic strategies of the USA. Countries started the negotiation of TPP in 2008 when USA joined Pacific Four (P-4) negotiations and in 2015 negotiations of TPP was concluded and text was released. Ministers from the member countries signed the agreement on February 4, 2016 [2]. The main aim of TPP is to liberalise trade and investment beyond what is provided for within the WTO. It is also considered to be a strategic move by the US to counter the trade linkages that are being established in the Asian region. TPP largely covers topics of market access, and rules on various related issues such as intellectual property rights, labour laws, and environment standards [3].

Between 1992 -2012 there has been an upsurge in bilateral trade agreements being signed in Asia from 25 to 103 and the effect of these FTAs is called the ‘noodle bowl effect’. TPP is seen as framework which will replace these FTAs which are causing the ‘noodle bowl effect’.While these FTAs are being replaced but with TPP being signed there are various bilateral arrangements signed along with TPP. USA has also stated that TPP will not affect the already existing NAFTA [4]. While TPP is being concluded there is another free trade agreement being negotiated between USA and EU , which is Trans Trade and Investment Partnership (TTIP). Both TPP and TTIP and are considered to be serving similar objective which is to deal with new and modern trade issues. Also both the agreements are US led and since negotiation for TPP are now finalised it may have a significant impact on TTIP [5].

TPP is one of the first document which deals specifically with digital economy and applies across borders. The main aims of TPP are to promote free flow of data across borders without data localisation. It aims to remove national clouts and regional internets. It also includes provisions to combat theft of trade secrets. It allows you to create transparent regulatory process with inputs from various stakeholders. It also aims to provide access to tools and procedures for conduct of e-commerce [6].

Some of the major criticism to TPP were regarding the issues related to [7]:

environment, wherein it does not address the issue of climate change and the language used in the agreement is very weak;
labour rights provision mandates parties to adhere to the ILO provision but it does not seem to provide for effective framework and might not bring the desired change;
investment chapter is seen to be controversial because of the investor state dispute settlement clause which will allow foreign investor to sue government over policies that might cause harm to them;
e-commerce and telecommunication chapter raises major privacy concerns;
intellectual property chapter wherein it includes controversial rules regarding pharmaceutical companies and data exclusivity apart from the privacy concerns.

2.2 Digital 2 Dozen (D2D)

D2D is set of rules and aims which is specifically drafted to be followed for the trade agreements related to open internet and digital economy. More specific aims of TPP as provided within the ‘Digital 2 Dozen,’ aiming for more liberalised trade in digital goods and services, are [8]:

promoting free and open internet,
prohibiting digital custom duties,
securing basic non-discrimination principles,
enabling cross-border data flows,
preventing localization barriers,
barring forced technology transfers,
advancing innovative authentication methods,
delivering enforceable consumer protections,
safeguarding network competition,
fostering innovative encryption products, and
building an adaptable framework.

Strategic goal of the US in introducing D2D as goals of TPP has been to set up a trend within Asian region for all the trade agreements. It is expected to ensure that if TPP is a success, similar goals and policy frameworks will be followed for other trade agreements as we. For example, the USA-India partnership also enshrines similar aims and so does the USA-Korea partnership. Hence while India is not part of TPP, USA is nonetheless trying to get India into a partnership which is similar to the TPP. The language proposed by the USA in TPP negotiations has always been supportive for cross border data flows as it claims that companies have mechanism to keep a privacy check and privacy would not be undermined, but countries like New Zealand and Australia which have strong privacy protection laws nationally have raised concerns which will be discussed in further sections [9]. Also not only in privacy rights but Digital Dozen initiative also affects other digital rights related to - excessive copyright terms TPP proposed to extend the term of copyright to hundred years which deprive access to knowledge; as in the U.S motive to give more power to private entities , the ISP obligations enumerated within TPP which puts freedom of expression and privacy at risk as ISPs are allowed to check for copyright infringement and TPP does not put any privacy restriction in this regard; introduction of new fair use rules; ban on circumvention of digital locks or DRMs; no compulsory limitation for persons with disabilities; lack of fair use for journalistic right; while net neutrality is major issue is many developing nations in Asia no effective provision for net neutrality is aimed at in the D2D initiative; prohibits open source mandates which puts barrier for countries which want to release any software as open source as a policy decision [10].

3. Major Issues Related to Data Protection and Privacy in the TPP

3.1. Data Protection

One of the major concern raised against TPP is regarding data protection provisions that have been integrated within the E- Commerce chapter of the agreement. Article 14.11 and Article 14 .13 are the ones that deal with data flow related to consumer information.Article 14.11 in the agreement puts a requirement on the member states to allow transfer of data across border and Article 14.13 does not allow the companies to host data on local servers. Concerns were raised in few member states for instance, Australian Privacy Foundation raised concerns over Article 14.11 which requires transfers to be allowed in context of business activities of service suppliers. It claimed that exception to this provision is very narrow and the repercussion for not following the exception is that investor state dispute settlement proceedings can be initiated, which is not sufficient to protect privacy. Also, it highlighted the issue that with the narrow exception provided under Article 14.13 which relates to prohibition on data localisation, it might have adverse effect on the implementation of national privacy laws within Australia [11].

Another provision which is of major concern is Article 14.13 which prohibit data localisation. It will raise problems for countries like Indonesia and China which will have to change their local laws to implement the provision [12]. Since there already has been a major concern with regard to USA- EU Safe Harbour Agreement which was later made subject to the ECJ’s ruling on data protection, which invalidated any arrangement which provides voluntary enterprises responsibility to enforce privacy. But both the USA and EU are in process of renegotiating the agreement.The major concern was that in EU data protection is a fundamental right while in USA data protection is more consumer centric. When similar concerns were raised in TPP negotiations, they were rebutted as USA claimed that FTA does not concern itself with data protection [13].

In 2012 Australia proposed an alternative language to TPP which allowed countries to place restriction on data flow as long as it was not a barrier to trade. U.S responded to concerns raised by the Australia through a side letter which ensured Australia that U.S and Australia have a mutual understanding in relation to privacy and U.S will ensure the privacy of data with regards to Australia. While Australia’s concern was given acknowledgement other countries which raised similar issues were not given any assurances [14]. US instead proposed ad- hoc strategy that gave private companies power to form privacy policy with implementation through state machinery [15].

3.2. Digital Privacy

Article 14.8 in the E- Commerce chapter of the agreement states that countries can form legal framework for the protection of rights but the kind of ‘legal framework’ is not defined. Also, nowhere it states that the privacy protection or data protection laws are expressly exempted, rather it states that any such policy implemented by member states will be put under review of TPP standards. The standards which TPP proposes to follow are based on the underlying idea that any such policy should not hinder free trade in any way. This test will be applied by tribunals which are experts in trade and investment and not on data protection or human rights [16]. While Article 14.8 provides for protection of private information of consumers but the footnote to the provision renders it ineffective. The footnote states that member countries can adopt legal framework for the protection of data which can be done by self-regulation by industry and does not provide for any comprehensive data protection obligation upon the member states [17]. Similar to this Article 13.4 of the telecommunications chapter under TPP also states that the countries can apply regulation regarding confidentiality of the messages as long as it is not “a means of arbitrary or unjustifiable discrimination or a disguised restriction on trade in services" [18].

Another chapter which raises major concerns about the privacy rights is intellectual property. It affects privacy through the provisions related to technological protective measures and the provision that regulate ISP’s liability. Regarding the TPM provision, the TPP follows the DMCA model whereby the exception to anti- circumvention provision is very narrow and does not apply to anti- trafficking provision. The exception allows user to circumvent TPM if it affect the user's privacy in any way, although this provision does not apply to ant- trafficking of TPM. The provision regarding ISP’s liability states that there should be cooperation between ISPs and rights holders and it does not prohibit ISPs to monitor its users. Also TPP proposes the notice for takedown and identification of the infringer by the ISP but this provision is not in consonance with laws of member states, like that of Peru which does not have any copyright law on ISP . Also many countries have tried to introduce proper privacy laws along with implementation of ISP liability but that is not done within the TPP [19]. TPP as whole aims to give greater power to private regulators without providing for minimum standard for protection of privacy.

Although TPP is not a data protection agreement but it consequently deals with various aspects of data protection, hence it is prospective model for privacy and data protection practices in future trade agreements. If positive obligations are included within the free trade agreements it will have an advancing impact on the data protection regime.

4.Implications of TPP for RCEP

While TPP has such lacunas similar provision are proposed in RCEP to which India is a party and which will have serious implication as many of the countries have inadequate data protection laws nationally and with the introduction of such an FTA the exploitation of privacy rights will be rampant [20]. To avoid this EU directive on data protection should be taken into consideration in the negotiations of such FTAs. But for the RCEP negotiations are still going on and in India many companies like Flipkart, Snapdeal etc. have started preparing for the changing norms. The government claims that it is going to accept best practices in the region which indicates that it is going to have same policies as that of TPP. Although people from industry have raised concerns that while there are national laws but it is difficult to check third party involvement within the business and it is becoming increasingly difficult to keep the consumer data confidential [21].

5. Implications of TPP in the Context of EU Safe-Harbour Judgement

Mr. Maximillian Schrems, an Austrian National residing in Austria, has been a user of the Facebook social network since 2008. Any person residing in EU who wishes to use Facebook is required to conclude, at the time of his registration, a contract with Facebook Ireland (a subsidiary of Facebook Inc. which itself is established in Unites States). Some or all of the personal data of the Facebook Ireland’s users who residing in EU is transferred to servers belonging to Facebook Inc. that are located in United States, where it undergoes processing. On 25 June 2013 Mr Schrems made a complaint to the commissioner by which he in essence asked the latter to exercise his statutory powers by prohibiting Facebook Ireland from transferring his personal data to Unites States, and this led to the Maximillian Schrems v Data Protection Commissioner case [22]. He contended that in his complaint that the law and practice in force in that country did not ensure adequate protection of the personal data held in its territory against the surveillance activities that were engaged in thereby by the public authorities. Mr Schrems referred in this regard to the revelations made by Edward Snowden concerning the activities of the United States intelligence services, in particular those of the NSA.(para 26, 27, 28). The case came in the court ruled that “that a third country which ensures an adequate level of protection, does not prevent a supervisory authority of a Member State, within the meaning of Article 28 of the EU 94/46 directive as amended, from examining the claim of a person concerning the protection of his rights and freedoms in regard to the processing of personal data relating to him which has been transferred from a Member State to that third country when that person contends that the law and practices in force in the third country do not ensure an adequate level of protection. The ruling implies that personal data cannot be transferred to third country which does not provide adequate level of protection.

EU safe harbour judgment and EU directive on privacy provide contrasting rules related to privacy. While TPP gives power to private entities to formulate rules regarding privacy while the recent ECJ judgment invalidated giving such power to private entities under EU-US Safe Harbour Agreement. Also in context of the same judgment Hamburg’s Commissioner for Data Privacy And Freedom of Information announced an investigation into the data transfer taking place through Facebook and Google to U.S. Hence in the light of the recent judgment member states within EU are not allowed to permit cross border data flow, in contrast to this one of the main goals of TPP is to maintain free flow of data across border [23]. EU is this regard has also set forth the proposal to introduce General Data Protection Regulation. (GDPR). Although U.S and EU are trying to renegotiate the agreement but the privacy concerns raised cannot be ignored. Hence following the same model as was invalidate under the ECJ judgment lets US exploit privacy of member states under TPP. Similar concerns as raised within the judgment are also raised in India as it also following the same model within U.S-India Cyber Relationship Agreement and in RCEP negotiations.

6. Implications of TPP in the context of USA-India Cyber Relationship

While India is not part of TPP but it might have an effect on the U.S India Cyber Relationship Agreement. In August 2015 there was re- initiation of the India-U.S cyber dialogue to address common concerns related to cybersecurity and to develop better partnerships between public and private sector for betterment of digital economy [24]. One of the key aim of this agreement is free flow of information between two nations, which suffers from similar problem that it will put privacy of the citizens at risk. Also India does not have any bilateral treaty which ensures cyber data protection in such a scenario the only solution is data localisation, but this agreement will put data at risk [25]. Hence while the TPP negotiations were going on and also RCEP is being discussed the concerns about privacy and data protection need to be raised as mention in earlier section regarding implications of TPP on RCEP, the USA-India Cyber Relationship also faces the same implications..Although the aim of USA-India Cyber Relationship is to ensure cybersecurity. After the cases of Muzaffarnagar riots, upheaval in North -Eastern states and Gujarat riots, India has realised it is important to ensure compliance from the social media companies. India sees the USA-India Cyber Relationship as an opportunity to achieve this goal. The Google Transparency Report states that that India made around three thousand requests to Google for user data [26], which indicate at the country's interest in having a common data understanding with the major social media companies (almost all of which are located in USA) about requesting and sharing of user activity data. While this concern is being addressed through the agreement, it is difficult to ignore the clause related to free flow of information, and if the meaning of the term is extended and adopted from TPP itself will put digital privacy of Indian citizens at risk [27].

7. Conclusion

Even though TPP negotiation are completed but the ratification of the agreement is still underway. TPP is being seen as one of a kind trade agreement because it is the first time that countries across the globe have come together as a whole to address concerns of modern trade. Although it fails to address some of the key concerns related to privacy and data protection which are becoming increasingly important. Data protection and privacy issues cannot be seen in isolation and needs to merged within the modern day trade agreements. The D2D component by the USA is strategic move to have trade dominance in Asia and to compete with China’s growth . TPP has privacy and data protection lacunae within the e- commerce , telecommunications and intellectual property discussion.Although it might have serious implications on RCEP negotiation and USA- India Cyber Relationship Dialogue. Similar concern regarding data protection has already been addressed by ECJ judgment invalidating USA-EU Safe Harbour Agreement but the similar ad - hoc strategy has been incorporated within TPP. Since TPP might be considered as best practice model for future FTAs in the Asian region it is important to raise and address these privacy concerns now.

8. Endnotes

[1] The signatory countries include Australia, Canada, Japan, Malaysia, Mexico, Peru, United States of America, Vietnam, Chile, Brunei, Singapore, New Zealand. "The Trans-Pacific Partnership," http://www.ustr.gov/tpp (last visited Jul 7, 2016).

[2] "The Origins and Evolution of the Trans-Pacific Partnership (TPP)," Global Research, http://www.globalresearch.ca/the-origins-and-evolution-of-the-trans-pacific-partnership-tpp/5357495 (last visited Jul 7, 2016).

[3] Fergusson, Ian F., Mark A. McMinimy & Brock R. Williams, "The Trans-Pacific Partnership (TPP): In Brief," (2015), http://digitalcommons.ilr.cornell.edu/key_workplace/1477/ (last visited Jul 1, 2016).

[4] Gajdos, Lukas, The Trans-Pacific Partnership and its impact on EU trade, Policy Department, Directorate-General for External Policies, Policy Briefing (2013), http://www.europarl.europa.eu/RegData/etudes/briefing_note/join/2013/491479/EXPO-INTA_SP(2013)491479_EN.pdf.

[5] Twining, Daniel, Hans Kundnani & Peter Sparding, Trans-Pacific Partnership: geopolitical implications for EU-US relations, Policy Department, Directorate-General for External Policies, June 24 (2016), http://www.europarl.europa.eu/RegData/etudes/STUD/2016/535008/EXPO_STU(2016)535008_EN.pdf.

[6] USTR, "Remarks by Deputy U.S. Trade Representative Robert Holleyman to the New Democrat Network," https://ustr.gov/about-us/policy-offices/press-office/speechestranscripts/2015/may/remarks-deputy-us-trade (last visited Jul 4, 2016).

[7] Murphy, Katharine, "Trans-Pacific Partnership: four key issues to watch out for," The Guardian, November 6, 2015, https://www.theguardian.com/business/2015/nov/06/trans-pacific-partnership-four-key-issues-to-watch-out-for (last visited Jul 7, 2016).

[8] USTR, "The Digital 2 Dozen" (2016), https://ustr.gov/sites/default/files/Digital-2-Dozen-Final.pdf (last visited Jul 1, 2016).

[9] Fergusson, Ian F.m Mark A. McMinimy & Brock R. Williams, "The Trans-Pacific Partnership (TPP) negotiations and issues for congress," (2015), http://digitalcommons.ilr.cornell.edu/key_workplace/1412/ (last visited Jul 8, 2016).

[10] "How the TPP Will Affect You and Your Digital Rights," Electronic Frontier Foundation (2015), https://www.eff.org/deeplinks/2015/12/how-tpp-will-affect-you-and-your-digital-rights (last visited Jul 7, 2016).

[11] Australian Privacy Foundation (APF), Trans Pacific Partnership Agreement (2016), https://www.privacy.org.au/Papers/Parlt-TPP-160310.pdf.

[12] Greenleaf, Graham, "The TPP & Other Free Trade Agreements: Faustian Bargains for Privacy?," SSRN (2016), http://papers.ssrn.com/sol3/Papers.cfm?abstract_id=2732386 (last visited Jul 1, 2016).

[13] "GED-Project: Transatlantic Data Flows and Data Protection," GED Blog (2015), https://ged-project.de/topics/competitiveness/transatlantic-data-flows-and-data-protection-the-state-of-the-debate/ (last visited Jul 1, 2016).

[14] Geist, Michael, "The Trouble with the TPP, Day 14: No U.S. Assurances for Canada on Privacy," (2016), http://www.michaelgeist.ca/2016/01/the-trouble-with-the-tpp-day-14-no-u-s-assurances-for-canada-on-privacy/ (last visited Jul 4, 2016).

[15] Aaronson, Susan Ariel, "What does TPP mean for the Open Internet?" From Policy Brief on Trade Agreements and Internet Governance Prepared for the Global Commission on Internet Governance (2015), https://www.gwu.edu/~iiep/events/DigitalTrade2016/TPPPolicyBrief.pdf (last visited Jul 5, 2016).

[16] Lomas, Natasha, "TPP Trade Agreement Slammed For Eroding Online Rights," TechCrunch, http://social.techcrunch.com/2015/11/05/tpp-vs-privacy/ (last visited Jun 30, 2016).

[17] "Q&A: The Trans-Pacific Partnership," Human Rights Watch (2016), https://www.hrw.org/news/2016/01/12/qa-trans-pacific-partnership (last visited Jul 1, 2016).

[18] "TPP Full Text Released," People Over Politics (2015), http://peopleoverpolitics.org/2015/11/07/tpp-just-as-bad-as-you-thought/ (last visited Jul 7, 2016).

[19] "Right to Privacy in Trans-Pacific Partnership (TPP ) Negotiations," Knowledge Ecology International, http://keionline.org/node/1164 (last visited Jul 1, 2016).

[20] Asian Trade Centre, "E-Commerce and Digital Trade Proposals for RCEP (2016)," http://static1.squarespace.com/static/5393d501e4b0643446abd228/t/575a654c86db438e86009fa1/1465541967821/RCEP+E-commerce+June+2016.pdf (last visited Jul 1, 2016).

[21] "E-commerce companies like Flipkart, Snapdeal to beef up data security to meet RCEP norms," The Economic Times, http://economictimes.indiatimes.com//articleshow/49068419.cms (last visited Jul 1, 2016).

[22] ECLI:EU:C:2015:650 (C -362/14)

[23] King et al., "Privacy law, cross-border data flows, and the Trans Pacific Partnership Agreement: what counsel need to know," Lexology, http://www.lexology.com/library/detail.aspx?g=b5c0b400-8161-4439-a4b7-131552ad5209 (last visited Jul 4, 2016).

[24] "U.S.-India Business Council Applauds Resumption of Cybersecurity Dialogue," U.S.-India Business Council (2015), http://www.usibc.com/press-release/us-india-business-council-applauds-resumption-cybersecurity-dialogue (last visited Jul 5, 2016).

[25] Sukumar, Arun Mohan, "India Is Coming up Against the Limits of Its Strategic Partnership With the United States," The Wire (2016), http://thewire.in/40403/india-is-coming-up-against-the-limits-of-its-strategic-partnership-with-the-united-states/ (last visited Jul 4, 2016).

[26] Countries – Google Transparency Report, https://www.google.com/transparencyreport/userdatarequests/countries/ (last visited Jul 8, 2016).

[27] Sukumar, Arun Mohan, "A case for the Net’s Ctrl+Alt+Del," The Hindu, September 5, 2015, http://www.thehindu.com/opinion/op-ed/a-case-for-the-nets-ctrlaltdel/article7616355.ece (last visited Jul 5, 2016).

9. Author Profile

Shubhangi Heda is a Student of Jindal Global Law School, O.P Jindal Global University. She has completed her fourth year. She gives due importance to popular culture in her life and loves to read fiction and like to watch TV-shows, her favorite being 'White Collar'.

For more details visit https://cis-india.org/internet-governance/blog/tpp-and-d2-implications-for-data-protection-and-digital-privacy

India No Haven For Net Freedom But It Did Not Oppose UN Move on Internet Rights

praskrishna — 2016-07-09T02:25:51Z

India hasn’t had the best record when it comes to Internet rights. The country regularly carries out Internet shutdowns under flimsy pretexts, is still fumbling when it comes to the drafting of a comprehensive privacy bill, and most recently came out with a geospatial information regulation bill that would establish ownership over all forms of location data.

The article by Anuj Srinivas was published in the Wire on July 6, 2016.

So, last week, when the United Nations Human Rights Council (UNHRC) passed a resolution on the “promotion, protection and enjoyment of human rights on the Internet”, it wasn’t surprising to see the wave of media criticism of the amendments that were proposed by countries such as China and Russia – and which were supported by India.

South Africa’s Mail & Guardian ran a story headlined “South Africa votes with China, Russia and India against Internet freedoms in UN resolution”. Private Internet Access’s headline was “These 17 Countries Don’t Believe that Freedom of Expression on the Internet is a Human Right”. Popular tech website The Verge noted that the resolution was opposed “by a minority of authoritarian regimes including Russia, China and Saudi Arabia, as well as democracies like South Africa and India. These nations called for the UN to delete a passage in the resolution that ‘condemns unequivocally measures to intentionally prevent or disrupt access to our dissemination of information online’.”

The Verge‘s report was followed up by a number of Indian publications including IndiaToday and Medianama – the latter incorrectly stating that the UNHRC resolution “recognised Internet usage as a basic human right – as well a host of other global publications.

The facts
There were two fundamental mistakes with some of these reports. Firstly, the resolution was adopted without vote (with oral revision) as noted by the UNHRC. Therefore, while there were a number of countries which co-sponsored the resolution and many that didn’t, it is completely wrong to state that India – as the Mail & Guardian reported – or any other country, voted against the resolution.

Secondly, as noted by the Centre for Internet and Society, none of the four amendments supported by India called for the deletion of a passage that condemned the prevention or disruption of Internet access and online information dissemination. Although it may fit neatly within India’s history of issuing Internet block orders, no country was opposed to this paragraph at the UNHRC forum (although many countries including India flout this clause in spirit back at home). No such amendment was proposed.

What then were these four amendments, which Article 19, an organisation that advocates freedom of expression, statedwould “substantially weaken the resolution”? Out of the four amendments (referred to as L85-88 in the UNHRC resolution), the first amendment (L85) – which sought to include a reference to fighting against the exploitation of children online – was withdrawn by Russia before it was considered by member states.

The other three amendments, while not completely endorsed by the countries that co-sponsored the resolution, do carry a certain level of nuance. Only one of the amendments (L86) can truly be described as diluting language regarding freedom of expression online, although this could have been potentially a result of procedural politics.

L88: Including Reference to Hate Speech
This amendment – proposed by Belarus, China, Iran and the Russian Federation – asks to introduce a new paragraph that states:

“Expresses its concern at the use of the Internet and information and communications technology to disseminate ideas based on racial superiority or hatred, and incitement to racial discrimination, xenophobia and related intolerance.”

Article 19 says of this amendment that it would “undermine the intended focus of the draft resolution on protecting human rights online, in particular freedom of expression..” While it is true that a few paragraphs of the resolution’s preamble include a reference to hate speech, it is difficult to see what harm this amendment would have brought in and even more difficult to accept that it would dilute the focus of the overall resolution.

Using the Internet and other online media technologies for incitement and as a means of propagating intolerance and xenophobia is a very real problem in India and other Asian countries, the most notable example of which was the role that social media played in the exodus of north-east Indian migrants from Bangalore four years ago. While shutdowns are obviously not the best way of dealing with this, it is important to acknowledge the role of the Internet as a medium in this aspect. In sum, this amendment certainly would not have diluted the resolution’s aim of promoting freedom of expression online.

L87: Human-Rights Approach
The second amendment replaces the term “human rights-based approach” with “comprehensive and integrated approach” in two paragraphs on expanding Internet access:

PP17: Stressing the importance of applying a comprehensive and integrated (human rights-based approach) in providing and expanding access to the Internet and for the Internet to be open, accessible and nurtured by multistakeholder participation,

OP5: Affirms also the importance of applying a comprehensive and integrated (human rights-based approach) in providing and in expanding access to Internet and requests all States to make efforts to bridge the many forms of digital divides..

This amendment was a little trickier. According to people involved in the country stakeholder discussions, whom The Wirespoke with, the aversion to a ‘human-rights’ approach towards expanding Internet access came as a result of China and Russia playing procedural politics. The language that was proposed in the amendment – “comprehensive and integrated” – while certainly not the strongest possible language that could have been used, would not have legally diluted the proposal to expand Internet access while maintaining an open and multistakeholder approach towards Internet governance.

Stepping back, what would a human rights-based approach in expanding Internet access look like? Would it include legitimising the act of zero-rating and the approval of schemes such as Facebook’s Free Basics? Both of which, incidentally, have been banned in India. While the proposed amendment certainly does not speak well of the motivations of China, Russia and India, the term is also vague enough that its mere removal doesn’t indicate a lack of support towards Internet freedom.

L88 – Right to privacy and removal of UDHR reference
This amendment, proposed by China and the Russian Federation, was more straightforward. In two paragraphs, it sought to add the specific term ‘right to privacy’, while in another paragraph it proposed removing reference to language from, and articles in, the Universal Declaration of Human Rights. Had the amendment been passed, the changes in the following paragraphs would have been made:

PP7: Noting that the exercise of human rights, in particular the right to freedom of expression and the right to privacy, on the Internet is an issue of increasing interest and importance as the rapid pace of technological development enables individuals all over the world to use new information and communication technologies,

OP15: Decides to continue its consideration of the promotion, protection and enjoyment of human rights, including the right to freedom of expression and the right to privacy, on the Internet and other information and communication technology, as well as of how the Internet can be an important tool for fostering citizen and civil society participation, for the realisation of development in every community and for exercising human rights, in accordance with its programme of work.

OP1: Affirms that the same rights that people have offline must also be protected online, in particular freedom of expression ~~which is applicable regardless of frontiers and through any media of one’s choice~~, and the right to privacy in accordance with articles 17 and 19 of the ~~Universal Declaration of Human Rights and the~~ International Covenant on Civil and Political Rights;

On one hand, this amendment would have added specific reference to the right to privacy. That specific term doesn’t appear in the draft resolution, although there are a few references to privacy in general in the resolution’s preamble.

However, the addition of a ‘right to privacy’ is coupled with a watering down of clear references to the protection of freedom of expression. Cynical observers would rightly note that China and Russia are probably less concerned with online privacy and more irked with the clear support of freedom of expression “regardless of frontiers” and “in accordance with the Universal Declaration of Human Rights”; which is probably why this particular proposed amendment combined both issues to improve its chances of passing. While there is little doubt that this amendment would have diluted the resolution’s focus on protecting freedom of expression, the alternative phrasing also doesn’t create legal loopholes that renders it useless. Moreover, it still contains reference to the International Covenant on Civil and Political Rights, especially Article 19, which goes beyond Article 19 of the UDHR .

India, a guardian?
It would be naive and wrong to take a strong position either way. To state that the amendments supported by India are all antithetical to the spirit of the UNHRC resolution, as some have done, is simply incorrect. On the other hand, this doesn’t mean India, and even less, China and Russia, are guardians of Internet freedom.

The UNHRC resolution in its entirety is a fine document. While non-binding, it provides a foundation for claiming that the same rights people have offline “must also be protected online”. Other crucial sections state that governments “should ensure accountability for all human rights violations and abuses committed against persons for exercising their human rights online”, while condemning “measures to intentionally prevent or disrupt access to or dissemination of information online”.

While the amendments India supported may not wholly oppose this resolution, it is also true that successive Indian governments also do not have an admirable track-record of upholding the resolution’s aims. Freedom for online speech had to be reclaimed in the form of court judgements, with the current government still supporting regulations that would allow it clamp down on online freedom of expression. In certain states within the country, Internet shutdowns happen without public explanations or justifiable reasoning. Over the last four years, for instance, Jammu and Kashmir has lost 18 days of Internet access. While it may not have wholly opposed the UNHRC resolution, the country still has a ways to go in terms of Internet freedom.

For more details visit https://cis-india.org/internet-governance/news/the-week-anuj-srinivas-july-6-2016-india-no-haven-for-net-freedom-but-did-not-oppose-un-move-on-internet-rights

Workshop on Set-top Boxes

sinha — 2016-06-24T15:13:22Z

The Centre for Internet and Society (CIS) is organising a one-day workshop in Delhi on Tuesday, July 12 on the evolution and state of the set-top box as an access device in India.

The workshop will be conducted by Dr. Rakesh Mehrotra who is a professor at Sharda University. It will be supported by an advisor from the Telecom Regulatory Authority of India to cover the aspect of regulation. The workshop will focus on the expanding functionality and innovations in set-top box (STB) technologies. It will also include an exposition on the regulatory regime applicable to STBs, around issues of interoperability, competition and privacy, and conclude with an outlook on the future of STBs.

We will initiate research collaborations with suitable participants to produce papers after the workshop. Certificates of participation will be provided.

Apply

There are limited spots for participants. Please state your interest by filling out this form here- http://goo.gl/forms/Mj77h0nkeVBJgHJn2 The deadline for filling application is July 5, 2016.

Fee and Funding

There is no registration fee for the workshop. Participants will be served lunch and refreshments at the venue. Please note that there is no funding for travel and accommodation.

For more details visit https://cis-india.org/telecom/events/workshop-set-top-boxes

Criminal Defamation and the Supreme Court’s Loss of Reputation

bhairav — 2016-06-03T03:05:14Z

The Supreme Court’s refusal, in Subramanian Swamy v. Union of India, to strike down the anachronistic colonial offence of criminal defamation is wrong. Criminalising defamation serves no legitimate public purpose; the vehicle of criminalisation – sections 499 and 500 of the Indian Penal Code, 1860 (IPC) – is unconstitutional; and the court’s reasoning is woolly at best.

The article was published in the Wire on May 14, 2016.

Politics and censorship

Two kinds of defamation actions have emerged to capture popular attention. First, political interests have adopted defamation law to settle scores and engage in performative posturing for their constituents. And, second, powerful entities such as large corporations have exploited weaknesses in defamation law to threaten, harass, and intimidate journalists and critics.

The former phenomenon is not new. Colonial India saw an explosion of litigation as traditional legal structures were swept away and native disputes successfully migrated to the colonial courts. These included politically-motivated defamation actions that had little to do with protecting reputations. In fact, defamation litigation has long become an extension of politics, in many cases a new front for political manoeuvring.

The latter type of defamation action is far more sinister. Powerful elites, both individuals and corporations, have cynically misused the law of defamation to silence criticism and chill the free press. By filing excessive and often unfounded complaints that are dispersed across the country, which threaten journalists with imprisonment, powerful elites frighten journalists into submission and vindictively hound those who refuse to back down. Such actions are called Strategic Lawsuits against Public Participation (SLAPPs) which Rajeev Dhavan warns have created a new system of censorship.

Petitions and politicians

Defamation originates from the concept of scandalum magnatum – the slander of great men – which protected the reputations of aristocrats. The crime was linked to sedition, so insulting a lord was akin to treason. In today’s neo-feudal India, political leaders are contemporary aristocrats. Investigating them can invite devastating consequences, even death. Most of the time, they retaliate through defamation law. Since the criminal justice system is most compromised at its base, where the police and magistrates directly interact with people, the misuse of criminal defamation law hurts ordinary citizens.

This is different from politicians prosecuting each other since they rarely, if ever, suffer punishment. Of all the petitions before the Supreme Court concerning the decriminalisation of defamation, the three that received the most news coverage were those of Subramanian Swamy, Rahul Gandhi, and Arvind Kejriwal. They are all politicians, their petitions were made in response to defamation complaints filed by rival politicians. On the other hand, there are numerous cases which politicians have filed against private members of civil society to silence them. When presented with these concerns, the Supreme Court simply failed to seriously engage with them.

The architecture of defamation

Defamation has many species, a convoluted history, and complex defences. Defamation can be committed by the spoken word, which is slander, or the written word, which is libel. The historical distinction between these two modes of defamation is based on the permanence of written words. Before the invention of the printing press, the law was chiefly concerned with slander. But as written ideas proliferated through mass publication technologies, libel came to be viewed as more malevolent and the law visited serious punishments on writers and publishers.

Such a distinction presumes a literate readership. In largely illiterate societies, the spoken word was more potent. This is why films and radio have long attracted censorship and state control in India. Before mass publishing forked defamation into libel and slander, there existed only the historical crime of libel. Historical libel had four species: seditious libel, blasphemous libel, obscene libel, and defamatory libel.

Seditious libel, which has been repealed in Britain, prospers in India as the offence of sedition which is criminalised by section 124A of the IPC. Blasphemous libel, repealed in Britain, fares well in India as the offence of blasphemy under section 295A of the IPC. Obscene libel, as the offence of obscenity, is criminalised by section 294 of the IPC. And defamatory libel, repealed in Britain, which is the offence of criminal defamation that the Subramanian Swamy case upheld, continues to exist under section 499 of the IPC.

Confusing harms

Of the many errors that litter the Supreme Court’s May 13, 2016 judgment in the Subramanian Swamy case, perhaps the most egregious is the failure to recognise the harm that criminal defamation poses to a healthy civil society in a free democracy. At the crux of this mistake is the Supreme Court’s failure to distinguish between private injury and social harm. Two people may, in their private capacities, litigate a civil suit to recover damages if one feels the other has injured her reputation. This private action of defamation was not in issue before the court.

On the other hand, by criminalising defamation, why should the state protect the reputations of individuals while expending public resources to do so? This goes to the concept of crime. When an action is serious enough to harm society it is criminalised. Rape strikes at the root of public safety, human dignity, equality, and peace, so it is a crime. A breach of contract only injures the party who was expecting the performance of contractual duties; it does not harm society, so it is not a crime. Similarly, a loss of reputation, which is by itself difficult to quantify, does no harm to society and so it should not be a crime.

Truth and the public good

It may be argued, and the Supreme Court hints, that at its fundament, society is premised on the need for truth; so lies should be penalised. This is where defamation law wanders into moral policing. In Indian and European philosophies, truth is consecrated as a moral good. The Supreme Court quotes from the Bhagavad Gita on the virtue of truth. But while quotes like these are undoubtedly meaningful, they have no utility in a constitutional challenge. In reality, society is composed of truth, lies, untruths, half-truths, rumour, satire, and a lot more. In fact, the more shades of opinion there are, the livelier that society is. So lies should not invite criminal liability.

If we concede the moral debate and arrive at a consensus that the law must privilege truth over lies, then truth alone should be a complete defence to defamation. If the law criminalises untruth, then it must sanctify truth. That means when tried for the crime of defamation, a journalist must be acquitted if her writing is true. But the law and the Supreme Court require more. In addition to proving the truth, the journalist must prove that her writing serves the public good. So speaking truth is illegal if it does not serve the public good.

In fact, truth has only recently been recognised as a defence to defamation, albeit not a complete defence. This belies the social foundations of criminal defamation law. The purpose of the offence is not to uphold truth, it is to protect the reputations of the powerful. But what is reputation? The Supreme Court spends 25 pages trying to answer this question with no success. Instead, the court declares that reputation is protected by the right to life guaranteed by Article 21 of the Indian Constitution but it offers no sound reasoning to support this claim. The court also fails to explain why the private civil action of defamation is insufficient to protect reputation.

The constitution and constitutionalism

There are two core constitutional questions posed by the Subramanian Swamy case. They are:

Does the crime of defamation fall within one of the nine grounds listed in Article 19(2) of the constitution; and
Are sections 499 and 500 of the IPC which criminalise and punish defamation reasonable restrictions on the right to free speech?

Article 19(2) contains nine grounds in the interests of which a law may reasonably restrict the right to free speech. Defamation is one of the nine grounds, but the provision is silent as to which type of defamation, civil or criminal, it considers. However, B.R. Ambedkar’s comments in the Constituent Assembly arguably indicate that criminal defamation was intended to be a ground to restrict free speech.

The answer to the second question lies in measuring the reasonableness of the restriction criminal defamation places on free speech. If the restriction is proportionate to the social harm caused by defamation, then it is reasonable. However, restating an earlier point, criminalising defamation serves no legitimate public purpose because society is unconcerned with the reputations of a few individuals. Even if society is concerned with private reputations, the private civil action of defamation is more than sufficient to protect private interests. Further, the danger that current criminal defamation law poses to India’s free speech environment is considerable. Dhavan says: “Defamation cases [are] a weapon by which the rich and powerful silence their critics and censor a democracy.”

The Subramanian Swamy case highlights several worrying trends in India’s constitutional jurisprudence. The judgment is delivered by one judge speaking for a bench of two. Such critically significant constitutional challenges cannot be left to the whims of two unelected and unaccountable men. Moreover, from its position as the guarantor of individual freedoms, the Supreme Court appears to be in retreat. This will have far-reaching and negative consequences for India’s citizenry. If the court fails to enhance individual freedoms, what is its constitutional role? The judiciary would do well to stay away from policy mundanities and focus on promoting India’s democratic project, lest it injure its own reputation.

For more details visit https://cis-india.org/internet-governance/blog/criminal-defamation-and-the-supreme-court2019s-loss-of-reputation

Comments on the RBI's Consultation Paper on Peer to Peer Lending

sumandro — 2016-06-01T20:21:13Z

The Reserve Bank of India published a Consultation Paper on Peer to Peer Lending on April 28, 2016, and invited comments from the public. CIS submitted the following response, authored by Elonnai Hickok, Pavishka Mittal, Sumandro Chattapadhyay, Vidushi Marda, and Vipul Kharbanda.

1. Preliminary

1.1. This submission presents comments and recommendations by the Centre for Internet and Society (“CIS”) on the Consultation Paper on Peer to Peer Lending (“the consultation paper”) by the Reserve Bank of India (“RBI”) [1].

2. The Centre for Internet and Society

2.1. The Centre for Internet and Society, CIS [2], is a non-profit organisation that undertakes interdisciplinary research on internet and digital technologies from policy and academic perspectives. The areas of focus include digital accessibility for persons with diverse abilities, access to knowledge, intellectual property rights, openness (including open data, free and open source software, open standards, open access, open educational resources, and open video), internet governance, telecommunication reform, digital privacy, and cyber-security. The academic research at CIS seeks to understand the reconfiguration of social processes and structures through the internet and digital media technologies, and vice versa.

2.2. This submission is consistent with CIS’ commitment to safeguarding general public interest, and the interests and rights of various stakeholders involved. The comments in this submission aim to further the concerns of citizens’ and users’ rights in the context of products, services, and transactions facilitated by digital media technologies, the , the principle that regulation should be defined around functions of the acts concerned, and not the technologies of delivery. Our comments are limited to the clauses that most directly have an impact on these concerns.

3. Response

3.1. Whether there is a felt need for regulating peer to peer lending platforms?

3.1.1. Peer to peer (“P2P”) lenders are platforms serving as marketplaces for the lenders and the borrowers of funds to connect. Their very business model does not render them as a provider of finance, as they aspire to function as pure intermediaries to enable lending and borrowing.

3.1.2. The Section 45I.(f)(iii) of the RBI Act, 1935 [3], provides RBI the authority to classify any financial institution as a non-banking financial company (“NBFC”) “with the previous approval of the Central Government and by notification in the Official Gazette.” Since the P2P lending platforms do not provide any finance themselves, undertake acquisition of financial instruments, deliver financial and/or insurance services, or collect financial resources directly, the only ground for classifying such companies as “financial institutions” [4] appears to be their involvement in “managing, conducting or supervising, as foreman, agent or in any other capacity, of chits or kuries as defined in any law which is for the time being in force in any State, or any business, which is similar thereto” [5]. P2P lending platforms can be considered to be brokers and thus there are other aspects that merit scrutiny such as antitrust issues, obligations of either party, company activities and the transactional system involved, as we will discuss in this document.

3.1.3. The consultation paper itself states that the balance sheet of the platform cannot indicate any borrowing / lending activity, which entails that the platform cannot itself provide finance or receive any funds for the provision of loans to others. Platforms are not allowed to determine the interest rates as they are not a party to the transaction. Neither would they be liable in cases of default by the borrower. These rules, standard for P2P platforms in other jurisdictions as well, confirm the assumption that the platform itself is not providing finance and thus, cannot be entrusted with any liability, obligation from the transaction.

3.1.4. Further, with RBI raising the threshold asset size for an NBFC to be considered systemically important (NBFC-ND-SI) from Rs. 100 Crores to Rs. 500 Crores [6], and Economic Times reporting that one of the biggest Indian P2P lending platform’s enterprise valuation (which can be taken as indicative of its net assets) is Rs 50 Crores [7], we may assume that most P2P lending platforms will have net assets worth less than 500 crore, at least in the near future; although there is a possibility for exponential growth with some companies.

3.1.5. Given the limited sphere of operation, restricted ability (by design) of these platforms to shape interest rates and other features of financial instruments, and their generally non-systemically-important nature, we would submit that the regulation of such P2P lending platforms are kept to an absolute minimum, so that their economic viability is not undermined, and at the same time the key risks associated with their operations are addressed by RBI.

3.2. Is the assessment of P2P lending and risks associated with it adequate?

3.2.1. CIS observes that the following are the key risks involved with the operations of the P2P lending platforms, and these are being respectively addressed by, or can be addressed by RBI in the following manners.

Insufficient information about the conditions of lending, leading to defrauding of the borrower: The borrower may not receive appropriate information about the terms of the loan, and/or the P2P lending platform may not act in a “fair” manner (say, in case of collusion between the P2P lending platform and the lender, or the lending platform and the borrower), which may lead to defrauding and/or economic loss of either party. By classifying P2P lending platforms as NBFCs, RBI will ensure that these companies follow the Guidelines on Fair Practices Code for NBFCs [8], which extensively addresses concerns related to this type of risks.
Insufficient information about the borrower, or her/his ability to repay the loan, may lead to non-repayment and economic loss of the lender: If the P2P lending platform allows the lender to offer loans to borrowers without acquiring and/or providing sufficient information to the lender about the borrower’s credit history and/or ability to repay the loan, modes of formulating security for loans, this may heighten the risks of non-repayment of loans. By classifying P2P lending platforms as NBFCs, RBI will ensure that these companies follow the Master Circular – 'Know Your Customer' (KYC) Guidelines – Anti Money Laundering Standards (AML) - Prevention of Money Laundering Act, 2002 - Obligations of NBFCs [9], which extensively addresses concerns related to this type of risks.
Credit-related information of the lenders and the borrowers collected by P2P lending platforms may not be made available to other financial institutions and that will lead asymmetry in credit information available across various actors in the sector: Credit information, related to both lending and borrowing practices of entities using the platform concerned, is a key asset of the P2P lending platforms. Lack of sharing of such information with Credit Information Companies, for economic reasons or otherwise, may however, lead to information asymmetry within the financial sector, which will structurally weaken the entire sector (with pieces of credit information being distributed across actors and not being shared internally). By classifying P2P lending platforms as NBFCs, RBI will ensure that these companies follow the Credit Information Companies (Regulation) Act, 2005 [10], which extensively addresses concerns related to this type of risks.
P2P lending platforms diversifying their financial operations without informing RBI and hence without appropriate regulatory control: It is possible that P2P lending platforms may decide to diversify their activities. There have been similar examples in other related sectors, say e-commerce marketplaces, that have started their own product re/selling companies that use the same online marketplace concerned. By classifying P2P lending platforms as NBFCs, RBI will ensure that these companies provide RBI with detailed and regular reports of their economic activities and investments, which is expected to address concerns related to this type of risks.

3.3. Are there any other risks which ought to be addressed?

3.3.1. CIS observes that as part of the usual transaction related activities of the P2P lending platforms, the companies will come into possession of what has been defined as “sensitive personal data or information” by the Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011 [11]. The concerns related to this type of risk is directly addressed by the Rules concerned, and may not require additional attention from the RBI.

3.3.2. CIS observes that as borrowers and lenders start using specific P2P lending platforms, the data regarding their credit histories and/or “financial reputation” will be owned by these companies. While such information might be shared internally within the financial sector through the Credit Information Companies, the borrowers and lenders themselves may not get direct access to such data. Hence, the borrowers and lenders will not be able to move easily and smoothly to a new P2P lending platform and make use of their existing credit information and/or “financial reputation” when accessing services offered via the new P2P lending platform. In other words, the borrowers and lenders may face a service provider lock-in, and inability to move between P2P lending platforms easily, without explicit access to their own credit history/reputation, and will not have the ability to migrate such information from one P2P lending platform to another (or to any other agency, for that matter). CIS submits that RBI must provide a mechanism to allow users to migrate between platforms as it has not been discussed in the consultation paper.

3.4. Is the proposed approach to regulating these platforms adequate?

3.4.1. CIS observes that while classification of P2P lending platforms will appropriately address key risks associated with their operations (as listed in 3.2.1. A-D), it will not address a major risk emerging out of their operations that is unique to the technological basis of the business concerned (as mentioned in 3.3.2.), and further, it will impose substantial financial and management obligations that have a very high probability of undermining the economic viability of this emerging and niche sector of intermediated direct lending and borrowing.

3.4.2. CIS observes that these financial and management obligations may involve the following topics among others discussed: 1) minimum net worth requirement for registration, 2) minimum investments required to be made government securities, 3) transferring of minimum percentage of net profits to RBI, 4) guidelines regarding corporate governance [12], etc.

3.4.3. Given this, CIS submits that instead of classifying P2P lending platforms as “Misc NBFCs,” a new sub-classification is created under the category of NBFC for such platforms, that directly addresses the key risks associated with businesses of P2P lending platforms, and protects lenders as well as borrowers while enhancing transparency in operations. This new sub-classification of P2P lending companies should also be divided into systemically-important and non-systemically-important like other NBFCs, and requirements regarding financial operations and corporate management should only be enforced for the former category of P2P lending companies.

3.5. Any other relevant issues pertaining to P2P lending

Beyond the issues already discussed above, CIS seek clarity from the RBI around the following aspects:

Transactional system pertaining to P2P lending:
1. What are the requirements and prerequisites for mandating the collection of user identity?
2. Establishing a maximum sum that can be transferred per transaction.
Company activities:
1. Fees that can be charged by platforms.
2. How data security can be best addressed.
3. How the financial transactions are brokered.
4. Modes of redressal.
5. Restitution to users if something goes amiss in the transaction.
6. Insurance that the company has to buy or capital on hand to support.

Endnotes

[1] See: https://www.rbi.org.in/scripts/bs_viewcontent.aspx?Id=3164.

[2] See: http://cis-india.org/.

[3] See: https://rbidocs.rbi.org.in/rdocs/Publications/PDFs/RBIA1934170510.pdf.

[4] See Section 45I.(c) of RBI Act, 1923, last amended on January 07, 2013.

[5] See Section 45I.(c)(v) of RBI Act, 1923, last amended on January 07, 2013.

[6] See: https://rbidocs.rbi.org.in/rdocs/content/pdfs/PNNBFC200315.pdf.

[7] See: http://economictimes.indiatimes.com/small-biz/startups/faircent-com-raises-pre-series-a-funding-of-250k/articleshow/47630279.cms.

[8] See: https://rbi.org.in/scripts/NotificationUser.aspx?Id=7866.

[9] See: https://rbi.org.in/scripts/BS_ViewMasCirculardetails.aspx?id=8168.

[10] See: http://www.incometaxindia.gov.in/Pages/acts/credit-information-companies-act.aspx.

[11] See: http://deity.gov.in/sites/upload_files/dit/files/GSR313E_10511%281%29.pdf.

[12] See: https://www.rbi.org.in/scripts/BS_NBFCNotificationView.aspx?Id=3706.

For more details visit https://cis-india.org/raw/comments-on-the-rbi-consultation-paper-on-peer-to-peer-lending

RBI Consultation Paper on P2P Lending: Data Security and Privacy Concerns

vipul — 2016-06-01T11:41:17Z

On April 28, 2016 the Reserve Bank of India published a consultation paper on P2P Lending and invited comments from the public on the same. The Paper discusses what P2P lending is, the various regulatory practices that govern P2P lending in different jurisdictions and lists our arguments for and against regulating P2P lending platforms.

Arguments against Regulation

The arguments against regulation of P2p lending companies as set out in the paper are (briefly):

Regulating an exempt or nascent sector may be perceived as rubber stamping the industry through regulation, thus lending credibility to the P2P lending which could attract ill informed lenders to the sector who may not understand all the risks associated with the industry. In this way Regulation may cause more harm than good.
Regulations may also be perceived as too stringent, thus stifling the growth of an innovative, efficient and accessible industry.
The P2P lending market is currently in a nascent stage and does not pose an immediate systemic risk meriting regulation.

Arguments in favour of Regulation

The arguments for regulating the market on the other hand are:

Considering the significance of the online industry and the impact which it can have on the traditional banking channels/NBFC sector, it would be prudent to regulate this emerging industry.
The, the importance of these methods of financing, specially in sectors where formal lending cannot reach, needs to be acknowledged.
If the sector is left unregulated altogether, there is the risk of unhealthy practices being adopted by one or more players, which may have deleterious consequences.
Section 45S of RBI Act prohibits an individual or a firm or an unincorporated association of individuals from accepting deposits “if its business wholly or partly includes any of the activities specified in clause (c) of section 45-I (i.e. activities of a financial institution); or if his or its principal business is that of receiving of deposits under any scheme or arrangement or in any other manner, or lending in any manner. Contravention of Section 45S is an offence punishable under section 58B (5A) of RBI Act. As per the Act, ‘‘deposit’’ includes and shall be deemed always to have included any receipt of money by way of deposit or loan or in any other form, but does not include any amount received from an individual or a firm or an association of individuals not being a body corporate, registered under any enactment relating to money lending which is for the time being in force in any State. Since the borrowers and lenders brought together by a P2P platform could fall within these prohibitions, absence of regulation may lead to perpetrating an illegality.”

After listing out the arguments, the paper adopts the approach of regulating this industry and proposes to bring P2P lending platforms under the purview of RBI’s regulation by defining them as Non Banking Financial Companies (NBFCs) under section 45-I(f)(iii) of the RBI Act. Once notified as NBFCs, RBI can issue regulations under sections 45JA and 45L. Though there is scope to comment on many aspects of the consultation paper our comments here will be limited to the data security and privacy aspects of the recommendations.

Data Security and Privacy Concerns

While the understanding of potential borrowers, specially those who have had experiences with commercial financial institutions, is that the more amount of information they provide, the better their chances become of getting a loan. This perception emanates from the fact that any potential borrower is asked for a myriad of documents, including personally identifying documents before a request for a loan is considered, infact for almost all financial institutions it is part of their core prudential norms to ask for identity documents before disbursing a loan. Getting as much information as possible from the borrower is not just a quirk of the financial institutions but it makes business sense for them, since it is those institutions who bear the risk of recovery of their money. There is no reason why the same logic or allowing creditors all the information about the borrower should not be applicable to P2P lending platforms, as far as the principle of prudential business practices is concerned. However, the key difference between disclosing information to P2P lending platforms as opposed to financial institutions is that whilst the information supplied to financial institutions stays limited to the institution and its employees, a large amount of the information (though not necessarily all) given to P2P platforms is made available to all potential creditors, which in P2P lending translates to any internet user who registers as a potential creditor. In this way the potential for the information to reach a wider group of people is much higher and therefore privacy and data security risks require special attention in P2P lending.

In section 5.3(v) of the Paper it is recommended that “Confidentiality of the customer data and data security would be the responsibility of the Platform. Transparency in operations, adequate measures for data confidentiality and minimum disclosures to borrowers and lenders would also be mandated through a fair practices code.” Whilst the fair practices code has not yet been developed or at least not yet made publicly available, as companies in the P2P lending industry are body corporates, these fair practice codes should be in line with and satisfy the requirements of section 43A of the Information Technology Act, 2000 (“IT Act”) as well as the Guidelines issued by the RBI’s Guidelines on Information security, Electronic Banking, Technology risk management and cyber frauds [1].

The minimum standards for data protection in Indian law have been laid down by section 43A of the IT Act and the Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011 (“Rules”) issued under section 43A. As per Rule 4 of the Rules P2P platforms would be required to have a privacy policy to deal with sensitive personal data, which includes any details regarding financial information such bank account, credit/debit cards, etc [2].

This policy would have to be published on the website of the platforms and would provide for a number of things such as (i) Clear and easily accessible statements of its practices and policies; (ii) type of personal or sensitive personal data or information collected; (iii) purpose of collection and usage of such information; (iv) disclosure of information including sensitive personal data or information; (v) reasonable security practices and procedures for the data. The other requirements of the Rules as regards consent before usage of the information, collection limitations, imparting information/notice to the consumer (information provider), retention limitation, purpose limitation, opt-out option, disclosure, etc. will also be applicable to P2P platforms and the fair practices code that the RBI would issue for this purpose will have to take all these issues into account.

The Rules also provide that body corporates will be considered to have complied with reasonable security practices if they have implemented such security practices and standards and have a comprehensive documented information security programme and information security policies that contain managerial, technical, operational and physical security control measures that are commensurate with the information assets being protected with the nature of business. Although there are no such practices which have been endorsed by any governmental body for P2P lending platforms, however the Department of Banking Supervision, Reserve Bank of India, has issued guidelines on “Information security, Electronic Banking, Technology risk management and cyber frauds" [3]. which could be relied upon until a fair practices code is put into place. The major privacy and data security provisions of these guidelines are given below:

Security Baselines: The guidelines require banks to be proactive in identifying and specifying the minimum security baselines to be adhered to by the service providers to ensure confidentiality and security of data;
Back up records: A cloud computing system must ensure backup of all its clients' information;
Security steps: An institution may take the following steps to ensure that risks with respect to confidentiality and security of data are adequately mitigated: (i) Address, agree, and document specific responsibilities of the respective parties in outsourcing; (ii) Discuss and agree on the instances where customer data shall be accessed; (iii) Ensure that service provider employees are adequately aware and informed on the security and privacy policies.
Confidentiality: Agreements should provide for maintaining confidentiality of customer's information even after the contract expires or is terminated by either party and specify the liability in case of security breach or leakage.
Encryption: Normally, a minimum of 128-bit SSL encryption is expected. Banks should only select encryption algorithms which are well established international standards.
Fraud Risk Management: It is also necessary that customer confidential information and other data/information available with banks is secured adequately to ensure that fraudsters do not access it to perpetrate fraudulent transactions.

Although inclusion of the above principles in the fair practices code would be helpful, however since the workings of P2P platforms are quite unique, therefore it would be counterproductive to restrict the security and privacy protocols to only those applied to regular banking transactions and the fair practices code should take into account these unique problems of P2P lending rather than seek to apply the existing norms blindly.

Endnotes

[1] See: https://rbidocs.rbi.org.in/rdocs/content/PDFs/GBS300411F.pdf.

[2] The Rules define “sensitive personal data or information” as information relating to: "(i) password, (ii) financial information such as Bank account or credit card or debit card or other payment instrument details, (iii) physical, physiological and mental health condition, (iv) sexual orientation, (v) medical records and history, (vi) Biometric information, (vii) any detail relating to the above clauses as provided to body corporate for providing service, and (viii) any of the information received under above clauses by body corporate for processing, stored or processed under lawful contract or otherwise."

[3] See: http://rbidocs.rbi.org.in/rdocs/content/PDFs/GBS300411F.pdf.

For more details visit https://cis-india.org/raw/rbi-consultation-paper-on-p2p-lending

Understanding Aadhaar and its New Challenges, May 26-27, 2016

sumandro — 2016-05-26T10:29:43Z

A workshop on “Understanding Aadhaar and its New Challenges” is being organised by the Centre for Studies in Science Policy, Jawaharlal Nehru University, and the Centre for Internet and Society, during May 26-27. It is also supported by the Centre for Communication Governance at NLU Delhi, Free Software Movement of India, Knowledge Commons, PEACE, and Center for Advancement of Public Understanding of Science & Technology. This is a legal and technical workshop to be attended by various key researchers and practitioners to discuss the current status of the implementation of the project, in the context of the passing of the Act and the various ongoing cases.

Workshop Programme

First Day, May 26

9:00-9:30	Registration
9:30-10:00	Prof. Dinesh Abrol - Welcome Self-introduction and expectations of participants Dr. Usha Ramanathan - Overview of the Workshop
10:00-11:00	Current Status of Aadhaar Dr. Usha Ramanathan, Legal Researcher, New Delhi - What the 2016 Law Says, and How it Came into Being S. Prasanna, Advocate, New Delhi - Status and Force of Supreme Court Orders on Aadhaar Discussion
11:00-11:30	Tea Break
11:30-13:30	Direct Benefits Transfers Prof. Reetika Khera, Indian Institute of Technology, Delhi - Welfare Needs Aadhaar like a Fish Needs a Bicycle Prof. Ram Kumar, Tata Institute of Social Sciences, Mumbai - Aadhaar and the Social Sector: A critical analysis of the claims of benefits and inclusion Ashok Rao, Delhi Science Forum - Cash Transfers Study Discussion
13:30-14:30	Lunch
14:30-16:00	Aadhaar: Science, Technology, and Security Prof. Subashis Banerjee, Deptt of Computer Science & Engineering, IIT, Delhi - Privacy and Security Issues Related to the Aadhaar Act Pukhraj Singh, former National Cyber Security Manager, Aadhaar, New Delhi - Aadhaar: Security and Surveillance Dimensions Discussion
16:00-16:30	Tea Break
16:30-17:30	Aadhaar - International Dimensions Prof. Chinmayi Arun, Center for Communication Governance, National Law University, Delhi - Biometrics and Mandatory IDs in other parts of the world Dr. Gopal Krishna, Citizens Forum for Civil Liberties - International Dimensions of Aadhaar Discussion
17:30-18:00	High Tea
18:00-19:00	Video Presentations

Second Day, May 27

9:30-11:00	Privacy, Surveillance, and Ethical Dimensions of Aadhaar Prabir Purkayastha, Free Software Movement of India, New Delhi - Surveillance Capitalism and the Commodification of Personal Data Arjun Jayakumar, SFLC - Surveillance Projects Amalgamated Col Mathew Thomas, Bengaluru - The Deceit of Aadhaar Discussion
11:00-11:30	Tea Break
11:30-10:30	Aadhaar: Broad Issues - I Prof. G Nagarjuna, Homi Bhabha Center for Science Education, Tata Institute of Fundamental Research, Mumbai - How to prevent linked data in the context of Aadhaar Dr. Anupam Saraph, Pune - Aadhaar and Moneylaundering Discussion
13:00-13:30	Video Presentations
13:30-14:30	Lunch
14:30-15:30	Aadhaar: Broad Issues - II Prof. MS Sriram, Visiting Faculty, Indian Institute of Management, Bangalore - Financial lnclusion Nikhil Dey, MKSS, Rajasthan (TBC) - Field witness: Technology on the Ground Prof. Himanshu, Centre for Economic Studies & Planning, JNU - UID Process and Financial Inclusion Discussion
15:30-16:00	Conclusion

For more details visit https://cis-india.org/internet-governance/events/understanding-aadhaar-and-its-new-challenges-may-26-27-2016

Identity of the Aadhaar Act: Supreme Court and the Money Bill Question

Vanya Rakesh and Sumandro Chattapadhyay — 2016-05-09T11:52:44Z

A writ petition has been filed by former Union minister Jairam Ramesh on April 6 challenging the constitutionality and legality of the treatment of this Act as a money bill. The Supreme Court heard the matter on April 25 and invited the Union government to present its view. It is our view that the Supreme Court can not only review the Lok Sabha speaker’s decision, but should also ask the government to draft the Aadhaar Bill again, this time with greater parliamentary and public deliberation. Vanya Rakesh and Sumandro Chattapadhyay wrote this article on The Wire.

Published by and cross-posted from The Wire.

The Aadhaar Act 2016, passed in the Lok Sabha on March 16, 2016, faced opposition ever since it was tabled in parliament. In particular, the move to introduce it as a money bill has been vehemently challenged on grounds of this being an attempt to bypass the Rajya Sabha completely. A writ petition has been filed by former Union minister Jairam Ramesh on April 6 challenging the constitutionality and legality of the treatment of this Act as a money bill. The Supreme Court heard the matter on April 25 and invited the Union government to present its view.

It is our view that the Supreme Court can not only review the Lok Sabha speaker’s decision, but should also ask the government to draft the Aadhaar Bill again, this time with greater parliamentary and public deliberation.

The money bill question

M.R. Madhavan has argued that the Aadhaar Act contains matters other than “only” those incidental to expenditure from the consolidated fund, as it establishes a biometrics-based unique identification number for beneficiaries of government services and benefits, but also allows the number to be used for other purposes beyond service delivery. While Pratap Bhanu Mehta calls this a subversion of “the spirit of the constitution”, P.D.T. Achary, former secretary general of the Lok Sabha, expressed concern about the attempts to pass off financial bills like Aadhaar as money bills as a means to circumvent and erode the supervisory role of the Rajya Sabha. Arvind Datar has further emphasised that when the primary purpose of a bill is not governed by Article 110(1), then certifying it as a money bill is an unconstitutional act.

Article 110(1) of the Constitution identifies a bill as a money bill if it contains “only” provisions dealing with the following matters, or those incidental to them:

imposition and regulation of any tax,
financial obligations undertaken by Indian Government,
payment into or withdrawal from the Consolidated Fund of India (CFI) or Contingent Fund of India,
appropriation of money and expenditure charged on the CFI or receipt, and
custody, issue or audit of money into CFI or public account of India.

However, the link of the Act with the Consolidated Fund of India is rather tenuous, since it depends on the Union or state governments declaring a certain subsidy to be available upon verification of the Aadhaar number. The objectives and validity of the Act would not actually change if the Aadhaar number no longer was directly connected to the delivery of services. The use of the word “if” in section 7 explicitly leaves scope for a situation where the government does not declare an Aadhaar verification as necessary for accessing a subsidy. In such a scenario, the Act will still be valid but without any formal connection with any charges on the Consolidated Fund of India.

A case of procedural irregularity?

The constitution of India borrows the idea of providing the speaker with the authority to certify a bill as money bill from British law, but operationalises it differently. In the UK, though the speaker’s certificate on a money bill is conclusive for all purposes under section 3 of the Parliament Act 1911, the speaker is required to consult two senior members, usually one from either side of the house, appointed by the committee from amongst those senior MPs who chair general committees. In India, the speaker makes the decision on her own.

Although article 110 (3) of the Indian constitution states that the decision of the speaker of the Lok Sabha shall be final in case a question arises regarding whether a bill is a money bill or not, this does not restrict the Supreme Court from entertaining and hearing a petition contesting the speaker’s decision. As the Aadhaar Act was introduced in the Lok Sabha as a money bill even though it does not meet the necessary criteria for such a classification, this treatment of the bill may be considered as an instance of procedural irregularity.

There is ample jurisprudence on what happens when the Supreme Court’s power of judicial review comes up against Article 122 – which states that the validity of any proceeding in the parliament can (only) be called into question on the grounds of procedural irregularities. In the crucial judgment of Raja Ram Pal vs Hon’ble Speaker, Lok Sabha and Others (2007), the court evaluated the scope of judicial review and observed that although parliament is supreme, unlike Britain, proceedings which are found to suffer from substantive illegality or unconstitutionality, cannot be held protected from judicial scrutiny by article 122, as opposed to mere irregularity. Deciding upon the scope for judicial intervention in respect of exercise of power by the speaker, in Kihoto Hollohan vs Zachillhu and Ors. (1992), the Supreme Court held that though the speaker of the house holds a pivotal position in a parliamentary democracy, the decision of the speaker (while adjudicating on disputed disqualification) is subject to judicial review that may look into the correctness of the decision.

Several past decisions of the Supreme Court discuss how the tests of legality and constitutionality help decide whether parliamentary proceedings are immune from judicial review or not. In Ramdas Athawale vs Union of India (2010), the case of Keshav Singh vs Speaker, Legislative Assembly (1964) was referred to, in which the judges had unequivocally upheld the judiciary’s power to scrutinise the actions of the speaker and the houses. It was observed that if the parliamentary procedure is illegal and unconstitutional, it would be open to scrutiny in a court of law and could be a ground for interference by courts under Article 32, though the immunity from judicial interference under this article is confined to matters of irregularity of procedure. These observations were reiterated in Mohd. Saeed Siddiqui vs State of Uttar Pradesh (2014) and Yogendra Kumar Jaiswal vs State of Bihar (2016).

Thus, the decision of the Lok Sabha speaker to pass and certify a bill as a money bill is definitely not immune from judicial review. Additionally, the Supreme Court has the power to issue directions, orders or writs for enforcement of rights under Article 32 of the constitution, therefore, allowing the judiciary to decide upon the manner of introducing the Aadhaar Act in parliament.

National implications demand public deliberation

As the provisions of the Aadhaar Act have far reaching implications for the fundamental and constitutional rights of Indian citizens, the Supreme Court should look into the matter of its identification and treatment as a money bill and whether such decisions lead to the thwarting of legislative and procedural justice.

The Supreme Court may also take this opportunity to reflect on the very decision making process for classification of bills in general. As Smarika Kumar argues, experience with the Aadhaar Act reveals a structural concern regarding this classification process, which may have substantial implications in terms of undermining public and parliamentary deliberative processes. This “trend,” as Arvind Datar notes, of limiting legislative discussions and decisions of national importance within the space of the Lok Sabha must be swiftly curtailed.

Apart from deciding upon the legality of the nature of the bill, it is vital that the apex court ask the government to categorically respond to the concerns red-flagged by the Standing Committee on Finance, which had taken great exception to the continued collection of data and issuance of Aadhaar numbers in its report, and to the recommendations passed in the Rajya Sabha recently. Further, the repeated violation of the Supreme Court’s interim orders – that the Aadhaar number cannot be made mandatory for availing benefits and services – in contexts ranging from marriages to the guaranteed work programme should also be addressed and responses sought from the Union government.

Evidently, the substantial implications of the Aadhaar Act for national security and fundamental rights of citizens, primarily privacy and data security, make it imperative to conduct a duly balanced public deliberation process, both within and outside the houses of parliament, before enacting such a legislation.

For more details visit https://cis-india.org/internet-governance/blog/identity-of-the-aadhaar-act-supreme-court-and-the-money-bill-question

Privacy Issues with DRM

Jalaj Pandey — 2016-05-03T02:41:15Z

This post has been written by Jalaj Pandey interning at CIS. It elaborates upon the various privacy issues with the Digital Rights Management. The author talks about the various ways in which content producers use DRM as a tool to infringe the privacy of the end users.

Nehaa Chaudhari provided inputs and also edited the blog post. Click to download the File.

The ubiquity of internet in today's world has made content and information sharing an easy task. A certain media file can be shared and made public with hardly any technical obstacles. Issues like hacking, unauthorized copying and publication, unlicensed usage have become concerns for content producers, who have employed Digital Rights Management (hereafter DRM) measures to address some of them.

Several instances of the online privacy intrusion by the content producers have been recorded. In such a scenario the balancing the rights of the content producers and the end users becomes an important one. It is imperative to find a common ground to safeguard the interests of both the parties involved. In the recent past DRM has been receiving a lot of flak because of the privacy issues contented by the users.

In the most rudimentary form privacy can be explained as any information about an individual which he/she does not want to be made public. It is important to mention that this information is seen from the perspective of an ordinary reasonable person. The UN Declaration of Human Rights, 1948, defines privacy as a fundamental right of every human. The functioning of the DRM is based on restricting the usage or distribution of the content. Since this restriction is only possible after there is a formal identification of the end user, the content producers end up collecting information about the users. For example: a DRM for a music file might work in a manner where it can only be accessed by one computer from which the user accesses and registers for the first time. DRMs initially identify the IP addresses of the system and make the file functioning on only that IP address. In this way the producer ends up collecting information about the end user. Different DRM models take different ways to collect information of their user. While collecting IP addresses in one of them the other way is tracking the user information via download, browsing activities, subscription service, etc. The usage log of the users is generated and becomes a valuable asset to assess and predict the preferences of the users

Two contentions of privacy have been raised on the privacy issues of DRM -

a) What is the accountability of this process and

b) Whether it puts the content producers in a position where they can control the users.

The information collected is under the control of content producers, who mostly store this information in the form database. BEUC (European Consumer Organization) claimed that the DRM systems technologically enable content providers to monitor private consumption of content, create reports of consumption, and profile users.

The information is at the disposal of the content producers. An assessment of DRM applications under Canadian Privacy showed that the firms did not even recognise privacy issues of the customers as a priority. In fact the firms failed to provide the information that was stored in their databases. This gives an idea about the lack of transparency that exists in collecting the information about users. The question whether users are aware of what information is being collected and to what extent they are being tracked online remains unanswered. The CEN/ISSS (European Committee for Standardization/ Information Society Standardisation System) pointed out that DRMs have a large potential to transmit, generate personal information about users. It has also been characterized by unprecedented levels of monitoring by various content producers.

Further the principled level argumentation to this is on lines of collection of information without any authentication from the user herself/himself. It is essential that if any information is collected or saved by the producers it should only be after taking consent of the user. Surveillance and compelled disclosure of information about intellectual consumption threaten rights to personal integrity.

DRMs take away the anonymity of the consumption. Since the producers can practically monitor the content usage of the user, this has led to wide scale of price discrimination. This means that producers would monitor and assess the preferences of the user and subsequently raise the prices of that particular class of products. In the report of FIPR (Foundation of Information Policy and Research) it was found that Microsoft had been trying to implement their DRM systems in their products using a similar approach to gain a monopoly position as in their strategy of browser implementation.

The Sony BMG copy protection rootkit scandal in 2005 brought much criticism to DRM. It was found out that Sony BMG had introduced illegal and harmful copy protection measure in its CDs. The rootkit element of the software is used to hide virtually all traces of the copy protection software's presence on a PC, so that an ordinary computer user would have no way to find it. Further more than just the DRM part of it the software also made the user's system open to a number of malwares and created vulnerabilities in the system. Sony was eventually made to compensate consumer costs, etc on the same. However the question of whether the database in the hands of companies can be used in arbitrary manner was intensely discussed after this.

It is essential that an effective framework is brought into effect which caters to privacy interests of the users. Privacy is the basic human right and it is the onus of the State to protect and safeguard this right. It is essential that the State does not compromise and support mechanisms which promote the welfare of the content producers over the users. The balance of users and producers becomes all the more important in a developing country like ours. The lack the awareness and the knowledge coupled with increasing usage of internet can lead to the exploitation of many. It is essential that the States see through these problems and collectively find an all encompassing solution to it.

K. G. Coffman and A. M. Odlyzko, Growth of the Internet, AT&T Labs - Research, July 6, 2001, available at, ( www.dtc.umn.edu/~odlyzko//doc/oft.internet.growth.pdf) (hereinafter Growth).

The Daily Source, The Growing Impact of the Internet, April 4, 2016, available at (https://www.dailysource.org/about/impact).

Corryne Mcsherry, Adobe Spyware Reveals (Again) The Price Of DRM: Your Privacy And Security, Electronic Frontier Foundation, October 17, 2014, available at,

(https://www.eff.org/deeplinks/2014/10/adobe-spyware-reveals-again-price-drm-your-privacy-and-security).

Digital Rights Management: A failure in the developed world, a danger to the developing world, Electronic Frontier Foundation, March 23, 2005, available at,

(https://www.eff.org/wp/digital-rights-management-failure-developed-world-danger-developing-world).

R. Subramanya and Byung k. Yi, Digital Rights Management, available at, ( https://www.academia.edu/8054608/Digital_Rights_Management) (hereinafter Digital Rights Management).

Global internet liberty campaign, privacy and human rights, An International Survey of Privacy Laws and Practice, available at, (http://gilc.org/privacy/survey/intro.html).

Ann Cavoukian, Privacy and Digital Rights Management (DRM): An Oxymoron, Information and Privacy Commissioner Ontario, available at, ( https://www.ipc.on.ca/images/Resources/up-1drm.pdf ) (hereinafter Oxymoron)

Varian, H.R. (1985) 'Price discrimination and social welfare', American Economic Review, Vol. 75, available at, (http://www.economics-ejournal.org/economics/journalarticles/2007-1/references/Varian1985).

Privacy and Digital Rights Management,A position paper for the W3C workshop on Digital Rights Management, January 2001, available at, ( www.w3.org/2000/12/drm-ws/pp/hp-poorvi.html).

Growth supra note, 1.

Digital Rights Management supra note, 5.

Thierry Rayna, Privacy or piracy, why choose? Two solutions to the issues of digital rights management and the protection of personal information, Intellectual Property Management, Vol. X, No. Y, available at,

(www.inderscienceonline.com/doi/abs/10.1504/IJIPM.2008.021138).

Oxymoron supra note, 7.

BEUC, Consumentenbond, and CLCV at DRM Working Group 1 (2002), available at, (https://privacy.org.nz/assets/Files/4558510.pdf).

Natali Helberger and Kristo´f Ker´enyi and Bettina Krings, Digital Rights Management and Consumer Acceptability: A Multi-Disciplinary Discussion of Consumer Concerns and Expectations, available at (citeseerx.ist.psu.edu/showciting?cid=733532).

Knud Bohle, Indicare, Research into unfriendly DRM : A Review, December, 2004,available at, (citeseerx.ist.psu.edu/showciting?cid=733532) (hereinafter Indicare).

European Committee for Standardization/Information Society Standardisation System (CEN/ISSS) DRM Report, 2003.

Indicare supra note, 16.

News Release, "Forrester Technographics Finds Online Consumers Fearful of Privacy Violations" (October 27, 1999 available at, (www.forrester.com/ER/Press/Release/0,1769,177,FF.html).

Julia E. Cohen, Georgetown Law Faculty Publications, DRM and Privacy, January 2010, available at,

(https://www.academia.edu/2164013/DRM_and_Privacy).

Moe, W. and Fader, P. (2004) 'Dynamic conversion behavior at e-commerce sites', Management Science, Vol. 50, available at,

(https://www.researchgate.net/publication/227447618_Dynamic_Conversion_Behavior_at_E-Commerce_Sites).

Privacy or piracy supra note, 21.

Sismeiro, C. and Bucklin, R. (2004) 'Modeling purchase behavior at an e-commerce web site: a task completion approach', Journal of Marketing Research, available at, (citeseerx.ist.psu.edu/showciting?cid=906878).

Ross Anderson, Foundation of Information Policy and Research Consultation Response to DRM (2004), available at, (www. fipr.org/APIG_DRM_submission.pdf).

Otto Helweg, Sony, Rootkits and Digital Rights Management Gone Too Far, Oct, Oct. 31, 2014, available at (https://blogs.technet.microsoft.com/markrussinovich/2005/10/31).

Sony BMG Litigation Info, Electronic Frontier Foundation, available at, (https://www.eff.org/cases/sony-bmg-litigation-info).

For more details visit https://cis-india.org/internet-governance/blog/privacy-issues-with-drm

Panel Discussion on UID/ Aadhar act 2016 and its impact on Social, Security

praskrishna — 2016-04-28T17:02:59Z

Sunil Abraham was a speaker at this event organized by Students Christian Movement of India at SCM House in Bangalore on April 25, 2016. Mathew Thomas and Usha Ramanathan also gave talks.

With the passage of the Aadhaar act 2016 is UID / Aadhar mandatory now? How do we understand the issue of Social Security in the context of the new law? What does it mean for those who need to access their senior citizen pension, rations, school and college scholarships, etc.

How does one understand the money bill route for introducing the bill in Parliament? What are implications of this for the validity of the law?

What will happen to the court cases challenging the UID now?

Where are we now on the thorny issues of surveillance, tracking, profiling, biometrics, private and foreign companies and subsidy? What does the law say?

This discussion will revisit the debates around the UID and examine the implications of the new law.

For more details visit https://cis-india.org/internet-governance/news/panel-discussion-on-uid-aadhar-act-2016-and-its-impact-on-social-security

The Aadhaar Act is Not a Money Bill

Amber Sinha — 2016-04-25T10:51:37Z

While the authority of the Lok Sabha Speaker is final and binding, Jairam Ramesh’s writ petition may allow the Supreme Court to question an incorrect application of substantive principles. This article by Amber Sinha was published by The Wire on April 24, 2016.

Originally published by The Wire on April 24, 2016.

Since its introduction as a money bill in the Lok Sabha in the first week of March [1], the Aadhaar (Targeted delivery of Financial and other subsidies, benefits and services) Bill, 2016 has been embroiled in controversy. The Lok Sabha rejected the five recommendations of the Rajya Sabha and adopted the bill on March 16 and only presidential assent was required for it become to become valid law. However, former Union Minister Jairam Ramesh filed a writ petition contesting the decision to treat the Aadhaar Bill as a money bill. The petition is due to be heard before the Supreme Court on April 25, and should the court decide to entertain the petition, it could have far-reaching implications for the Aadhaar project and the manner in which money bills are passed by the Parliament.

There are three broad categories of bills (all legislations or Acts are known as ‘bills’ till they are passed by the Parliament) that the Parliament can pass. The first kind, Constitution Amendment Bills, are those that seek to amend a provision in the Constitution of India. The second are financial bills which contain provisions on matters of taxation and expenditure. Money bills are a subset of the financial bills which contain provisions only related to taxation, financial obligations of the government, expenditure from or receipt to the Consolidated Fund of India and any matters incidental to the above. The third category is of ordinary bills which includes all other bills. The process for the enactment of all these bills is different. Money bills are peculiar in that they can only be introduced in the Lok Sabha where it can be passed by simple majority. Following this, it is transmitted to the Rajya Sabha. The Rajya Sabha’s powers are restricted to giving recommendations on the Bill and sending it back to the Lok Sabha, which the Lok Sabha is under no obligation to accept. The decision to introduce the Aadhaar Bill as a money bill has been widely seen as an attempt to circumvent the Rajya Sabha where the ruling party is in a minority.

Article 110 (1) of the Constitution defines a money bill as one containing provisions only regarding the matters enumerated or any matters incidental to them. These are a) imposition, regulation and abolition of any tax, b) borrowing or other financial obligations of the Government of India, c) custody, withdrawal from or payment into the Consolidated Fund of India (CFI) or Contingent Fund of India, d) appropriation of money out of CFI, e) expenditure charged on the CFI or f) receipt or custody or audit of money into CFI or public account of India. Article 110 is modelled on Section 1(2) of the (UK) Parliament Act, 1911 which also defines the money bills as those only dealing with certain enumerated matters. The use of the word “only” was brought up by Ghanshyam Singh Gupta during the Constituent Assembly Debates. He pointed out that the use of the word “only” limits the scope of money bills to only those legislations which did not deal with other matters. His amendment to delete the word “only” was rejected clearly establishing the intent of the framers of the Constitution to keep the ambit of money bills extremely narrow.

While the Aadhaar Bill does make references to benefits, subsidies and services funded by the Consolidated Fund of India (CFI), even a cursory reading of the bill reveals its main objectives as creating a right to obtain a unique identification number and providing for a statutory apparatus to regulate the entire process. The mere fact of establishing the Aadhaar number as the identification mechanism for benefits and subsidies funded by the CFI does not give it the character of a money bill. The bill merely speaks of facilitating access to unspecified subsidies and benefits rather than their creation and provision being the primary object of the legislation. Erskine May’s seminal textbook, ‘Parliamentary Practice” is instructive in this respect and makes it clear that a legislation which simply makes a charge on the Consolidated Fund does not becomes a money bill if otherwise its character is not that of one.

PDT Achary, former secretary general of the Lok Sabha, has expressed concern about the use of Money Bills as a means to circumvent the Rajya Sabha. He has written here [2] and here [3], on what constitutes a money bill and how the attempts to pass off financial bills like the Aadhaar Bill as money bills could erode the supervisory role Rajya Sabha is supposed to play. This is especially true in the case of a legislation like the Aadhaar Bill which has far reaching implications for individual privacy as it governs the identification system conceptualised to provide a unique and lifelong identity to residents of India dealing with both the analog and digital machinery of the state and by virtue of Section 57 of any private entities. Already over 1 billion people have been enrolled under this identification scheme, and the project has been a subject of much debate and a petition before the Supreme Court. The project has been portrayed as both the last hope for a welfare state and surveillance infrastructure. Regardless of which of the two ends of spectrum one leans towards, it is undeniable that the law governing the Aadhaar project deserved a proper debate in the Parliament. Even those who are strong proponents of the project must accept the decision to pass it off as a money bill undermines the importance of democratic processes and is a travesty on the Constitution and a blatant abrogation of the constitutional duties of the speaker.

The petition by Jairam Ramesh would hinge largely on the powers of the judiciary to question the decision of the Speaker of the Lok Sabha. Article 110 (3) is very clear in pronouncing the authority of the Speaker as final and binding. Additionally, Article 122 prohibits the courts from questioning the validity of any proceedings in Parliament on the ground of any alleged irregularity of procedure. The powers of privilege that Parliamentarians enjoy are integral to the principle of separation of powers. However, the courts may be able to make a fine distinction between inquiring into procedural irregularity which is prohibited by the Constitution; and questioning an incorrect application of substantive principles, which I would argue, is the case with the Speaker decision.

References

[1] See: http://thewire.in/2016/03/07/arun-jaitley-introduces-money-bill-on-aadhar-in-lok-sabha-24115/.

[2] See: http://indianexpress.com/article/opinion/columns/show-me-the-money-4/.

[3] See: http://www.thehindu.com/opinion/lead/circumventing-the-rajya-sabha/article7531467.ece.

For more details visit https://cis-india.org/internet-governance/blog/the-aadhaar-act-is-not-a-money-bill

Can the Matters Dealt with in the Aadhaar Act be the Objects of a Money Bill?

Pooja Saxena — 2016-04-24T14:15:06Z

In this infographic, we highlight the matters dealt with in the Aadhaar Act 2016, recently tabled in and passed by the Lok Sabha as a money bill, and consider if these can be objects of a money bill. The infographic is designed by Pooja Saxena, based on information compiled by Sumandro Chattapadhyay and Amber Sinha.

Download the infographic: PDF and JPG.

License: It is shared under Creative Commons Attribution 4.0 International License.

For more details visit https://cis-india.org/internet-governance/blog/can-matters-dealt-with-in-aadhaar-act-be-objects-of-money-bill

Can the Aadhaar Act 2016 be Classified as a Money Bill?

Pooja Saxena — 2016-04-25T13:48:41Z

In this infographic, we show if the Aadhaar Act 2016, recently tabled in and passed by the Lok Sabha as a money bill, can be classified as a money bill. The infographic is designed by Pooja Saxena, based on information compiled by Amber Sinha and Sumandro Chattapadhyay.

Download the infographic: PDF and JPG.

License: It is shared under Creative Commons Attribution 4.0 International License.

For more details visit https://cis-india.org/internet-governance/blog/can-the-aadhaar-act-2016-be-classified-as-a-money-bill

Aadhaar by Numbers

praskrishna — 2016-09-11T16:36:58Z

Sunil Abraham will be addressing a public seminar at an event organized by National Institute of Public Finance and Policy (NIPFP) in New Delhi on Friday, April 29, 2016.

This talk will reflect on several aspects of the Aadhaar project from a technical perspective. First, there will be a reflection on biometrics as a unique, identification and authentication technology. Second, there will be a critique of open washing by the UIDAI through their adoption of free software and open standards and finally there will be an analysis of alternative technical solutions and architecture which will allow India to harvest the benefits of identity management without the harms and risks of centralized biometrics.

Sunil Abraham

Sunil Abraham (an Ashoka Fellow) is the executive director of the Centre for Internet and Society (CIS), Bangalore/New Delhi. CIS is a 7 year old policy and academic research organisation that focuses on accessibility, access to knowledge, internet governance and telecommunications. He is also the founder and director of Mahiti, a 17 year old social enterprise that aims to reduce the cost and complexity of ICTs for the voluntary sector by using free software. Starting 2004, for 3 years, Sunil also managed the International Open Source Network, a project of UNDP's APDIP, serving 42 countries in the Asia-Pacific region. Sunil currently serves on the advisory boards of OSF – Information Programme, Mahiti and Samvada.

The talk reflected on several aspects of the Aadhaar project from a technical perspective. First, there is a reflection on biometrics as a unique, identification and authentication technology. Second, there is a critique of open washing by the UIDAI through their adoption of free software and open standards and finally there is an analysis of alternative technical solutions and architecture which will allow India to harvest the benefits of identity management without the harms and risks of centralized biometrics.

Video

For more details visit https://cis-india.org/internet-governance/news/aadhaar-by-numbers