DLA Piper Intelligence

Data Protection
Laws of the World

Law

India
India

On August 24, 2017, a Constitutional Bench of nine judges of the Supreme Court of India in Justice K.S.Puttaswamy (Retd.) v. Union of India [Writ Petition No. 494/ 2012] upheld that privacy is a fundamental right, which is entrenched in Article 21 [Right to Life & Liberty] of the Constitution. This led to the formulation of a comprehensive Personal Data Protection Bill 2018.[1] However, presently the Information Technology Act, 2000 (the Act) contains specific provisions intended to protect electronic data (including non-electronic records or information that have been, are currently or are intended to be processed electronically).

India’s IT Ministry adopted the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules (Privacy Rules). The Privacy Rules, which took effect in 2011, require corporate entities collecting, processing and storing personal information, including sensitive personal information, to comply with certain procedures. It distinguishes both ‘personal information’ and ‘sensitive personal information’, as defined below.

In August 2011, India’s Ministry of Communications and Information issued a ‘Press Note’ Technology (Clarification on the Privacy Rules), which provided that any Indian outsourcing service provider/organization providing services relating to the collection, storage, dealing or handling of sensitive personal information or personal information under contractual obligation with any legal entity located within or outside India is not subject to collection and disclosure of information requirements, including the consent requirements discussed below, provided that they do not have direct contact with the data subjects (providers of information) when providing their services.

[1] This Bill has not been introduced in the Parliament, but proposes a legal framework to protect the autonomy of individuals in relation to their personal data, to specify where the flow and usage of personal data is appropriate, to create a relationship of trust between persons and entities processing their personal data, to specify the rights of individuals whose personal data are processed, to create a framework for implementing organizational and technical measures in processing personal data, to lay down norms for cross-border transfers of personal data, to ensure the accountability of entities processing personal data, to provide remedies for unauthorized and harmful processing, and to establish a Data Protection Authority for overseeing processing activities.

Last modified 28 Jan 2019
Law
India

On August 24, 2017, a Constitutional Bench of nine judges of the Supreme Court of India in Justice K.S.Puttaswamy (Retd.) v. Union of India [Writ Petition No. 494/ 2012] upheld that privacy is a fundamental right, which is entrenched in Article 21 [Right to Life & Liberty] of the Constitution. This led to the formulation of a comprehensive Personal Data Protection Bill 2018.[1] However, presently the Information Technology Act, 2000 (the Act) contains specific provisions intended to protect electronic data (including non-electronic records or information that have been, are currently or are intended to be processed electronically).

India’s IT Ministry adopted the Information Technology (Reasonable Security Practices and Procedures and Sensitive Personal Data or Information) Rules (Privacy Rules). The Privacy Rules, which took effect in 2011, require corporate entities collecting, processing and storing personal information, including sensitive personal information, to comply with certain procedures. It distinguishes both ‘personal information’ and ‘sensitive personal information’, as defined below.

In August 2011, India’s Ministry of Communications and Information issued a ‘Press Note’ Technology (Clarification on the Privacy Rules), which provided that any Indian outsourcing service provider/organization providing services relating to the collection, storage, dealing or handling of sensitive personal information or personal information under contractual obligation with any legal entity located within or outside India is not subject to collection and disclosure of information requirements, including the consent requirements discussed below, provided that they do not have direct contact with the data subjects (providers of information) when providing their services.

[1] This Bill has not been introduced in the Parliament, but proposes a legal framework to protect the autonomy of individuals in relation to their personal data, to specify where the flow and usage of personal data is appropriate, to create a relationship of trust between persons and entities processing their personal data, to specify the rights of individuals whose personal data are processed, to create a framework for implementing organizational and technical measures in processing personal data, to lay down norms for cross-border transfers of personal data, to ensure the accountability of entities processing personal data, to provide remedies for unauthorized and harmful processing, and to establish a Data Protection Authority for overseeing processing activities.

Last modified 28 Jan 2019
Definitions

Definition of personal data

The Privacy Rules define the term personal information as any information that relates to a natural person, which either directly or indirectly, in combination with other information that is available or likely to be available to a corporate entity, is capable of identifying such person.

Definition of sensitive personal data

The Privacy Rules define ‘sensitive personal data or information' to include the following information relating to:

  • Passwords
  • Financial information eg, bank account/credit or debit card or other payment instrument details
  • Physical, physiological and mental health conditions
  • Sexual orientation
  • Medical records and history
  • Biometric information
  • Any detail relating to the above clauses as provided to a corporate entity for providing services
  • Any of the information received under the above clauses for storing or processing under lawful contract or otherwise

Biometrics means the technologies that measure and analyze human body characteristics, such as fingerprints, eye retinas and irises, voice patterns, facial patterns, hand measurements and DNA for authentication purposes.

However, any information that is freely available in the public domain is exempt from the above definition.

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Authority

No such authority exists.

 

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Registration

No requirements.

 

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Data Protection Officers

Every corporate entity collecting sensitive personal information must appoint a Grievance Officer to address complaints relating to the processing of such information, and to respond to data subject access and correction requests in an expeditious manner but within one month from the date of receipt of the request or grievance.

There is no specific requirement that the data protection officer must be a citizen of or resident of India, nor are there any specific enforcement actions or penalties associated with not appointing a data protection officer correctly. However, appointment of a data protection officer is part of the statutory due diligence process and it is thus imperative that such an officer should be appointed.

Last modified 28 Jan 2019
Collection & Processing

Under the Act, if a corporate entity that possesses, manages or handles any sensitive personal information in a computer resource that it owns, controls or operates, is negligent in implementing and maintaining compliance with the Privacy Rules, and its negligence causes wrongful loss or wrongful gain to any person, the corporate entity shall be liable for damages to the person(s) affected.

The Privacy Rules state that any corporate entity or any person acting on its behalf that collects sensitive personal information must obtain written consent (through letter, email or fax) from the providers of that information. However, the August 2011 Press Note issued by the IT Ministry clarifies that consent may be given by any mode of electronic communication.

The Privacy Rules also mandate that any corporate entity (or any person, who on behalf of such entity) that collects, receives, possess, stores, deals or handles information shall provide a privacy policy that discloses its practices regarding the handling and disclosure of personal information, including sensitive personal information, and ensure that the policy is available for view, including on the website of the corporate entity (or the person acting on its behalf). Specifically, the corporate entity must ensure that the person to whom the information relates is notified of the following at the time of collection of sensitive personal information or other personal information:

  • The fact that the information is being collected
     
  • The purpose for which the information is being collected
     
  • The intended recipients of the information
     
  • The name and address of the agency that is collecting the information and the agency that will retain the information

Further, sensitive personal information may only be collected for a lawful purpose connected with a function or purpose of the corporate entity and only if such collection is considered necessary for that purpose. The corporate entity must also ensure that it does not retain the sensitive personal information for longer than it is required and should also ensure that the sensitive personal information is being used for the purpose for which it was collected.

A corporate entity or any person acting on its behalf is obligated to enable the providers of information to review the information they had so provided and also to ensure that any personal information or sensitive personal information that is found to be inaccurate or deficient is corrected upon request. Further, the provider of information has to be provided a right to opt out (ie, he/she will be able to withdraw his or her consent) even after consent has been provided. However, the corporate entity will not be held responsible for the authenticity of the personal information or sensitive personal information given by the provider of information to such corporate entity or any other person acting on its behalf.

 

Last modified 28 Jan 2019
Transfer

The data collector must obtain the consent of the provider of the information for any transfer of sensitive personal information to any other corporate entity or person in India, or to any other country that ensures the same level of data protection as provided for under the Privacy Rules. However, consent is not necessary for the transfer if it is required for the performance of a lawful contract between the corporate entity (or any person acting on its behalf) and the provider of information or as otherwise specified in the Act.

A corporate entity may not transfer any sensitive personal information to another person or entity that does not maintain the same level of data protection as required by the Act.

The contract regulating the data transfer should contain adequate indemnity provisions for a third party breach, should clearly specify the end purposes of the data processing (including who has access to such data) and should specify a mode of transfer that is adequately secured and safe.

Further, under the Act, it is an offense for any person who has pursuant to a contract gained access to any material containing personal information to disclose that information without the consent of the person concerned, and with the intent to cause or knowing that he is likely to cause wrongful loss or wrongful gain.

Thus, contracts should also specifically include provisions:

  • Entitling the data collector to distinguish between ‘personal information’ and ‘sensitive personal information’ that it wishes to collect/process, and
     
  • Representing that the consent of the person(s) concerned has been obtained for collection and disclosure of personal information or sensitive personal information, and outlining the liability of the third party

Data Localization

India’s central bank, the Reserve Bank of India (RBI) has made it mandatory from October 15, 2018, for all payment system providers and their service providers, intermediaries, third party vendors and other entities in the payment ecosystem to ensure that all data relating to payment systems operated by them are stored in a system only in India. Interestingly, by virtue of this regulation, RBI is seeking storage of all payment system data, which includes the entire payment processing cycle from request to final payout.

Last modified 28 Jan 2019
Security

A corporate entity possessing, dealing or handling any sensitive personal information in a computer resource which it owns, controls or operates is required to implement and maintain reasonable security practices and procedures to secure the sensitive personal information. The reasonable security practices and procedures may be specified in an agreement between the parties.

Further, the Privacy Rules provide that in the absence of such agreement ‘reasonable security practices and procedures’ to be adopted by any corporate entity to secure sensitive personal information are procedures that comply with the IS/ISO/IEC 27001 standard or with the codes of best practices for data protection as approved by the federal government. Presently, no such codes of best practices have been approved by the federal government.

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Breach Notification

The government of India has established and authorized the Indian Computer Emergency Response Team ("Cert-In") to collect, analyze and disseminate information on cyber incidents, provide forecasts and alerts of cybersecurity incidents, provide emergency measures for handling cybersecurity incidents and coordinate cyber incident response activities.

The Information Technology (the Indian Computer Emergency Response Team and Manner of Performing Functions and Duties) Rules, 2013 ("Cert-In Rules") impose mandatory notification requirements on service providers, intermediaries, data centers and corporate entities, upon the occurrence of certain cybersecurity incidents.

Cybersecurity incidents have been defined to mean any real or suspected adverse events, in relation to cybersecurity, that violate any explicitly or implicitly applicable security policy, resulting in:

  • Unauthorized access, denial or disruption of service
  • Unauthorized use of a computer resource for processing or storage of information
  • Changes to data or information without authorization

The occurrence of the following types of cybersecurity incidents trigger the notification requirements under the Cert-In Rules:

  • Targeted scanning or probing of critical networks or systems
  • Compromise of critical information or system
  • Unauthorized access of IT systems or data
  • Defacement of websites or intrusion into websites and unauthorized changes, such as inserting malicious codes or links to external websites
  • Malicious code attacks such as spreading viruses, worms, Trojans, Botnets or Spyware
  • Attacks on servers such as Database, Mail and DNS or network devices such as Routers
  • Identity theft, Spoofing and phishing attacks
  • Denial of service (DoS) and Distributed Denial of service (DDoS) attacks
  • Attacks on critical infrastructure, SCADA systems and wireless networks
  • Attacks on applications such as e-governance and e-commerce

Upon the occurrence of any of the aforementioned events, companies are required to notify the Cert-In within reasonable time, so as to leave scope for appropriate action by the authorities. However, it is important to follow breach notice obligations, which would depend upon the "place of occurrence of such breaches" and whether or not Indian customers have been targeted. The format and procedure for reporting of cybersecurity incidents have been provided by Cert-In on its official website.

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Enforcement

Civil penalties of up to €694,450 for failure to protect data including sensitive personal information may be imposed by an Adjudicating Officer; damages in a civil suit may exceed this amount.

Criminal penalties of up to three years of imprisonment or a fine up to €6,950, or both for unlawful disclosure of information.

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Electronic Marketing

The Act does not refer to electronic marketing directly. Dishonestly receiving data, computer database or software is an offense. However, in a related development, the Food Safety and Standards Authority of India (FSSAI) has made it mandatory for E-commerce FBOs (Food Business Operators) to obtain a license from the Central Licensing Authority. E-commerce FBO means any Food Business Operator carrying out any of the activities in section 3(n) of Food Safety & Standards Act, 2006, through the medium of e-commerce. Interestingly, section 3(n) covers the entire food chain as it defines “food business” as any undertaking, whether for-profit or not, and whether public or private, carrying out any of the activities related to any stage of manufacture, processing, packaging, storage, transportation, distribution of food, import and includes food services, catering services, sale of food or food ingredients. Similarly, another set of legal Rules being referred as “E-commerce & the Legal Metrology (Packaged Commodities) Amendment Rules, 2017,” effective from January 1, 2018, has made it mandatory for an e-commerce entity to ensure mandatory declarations about the commodity displayed on the digital and electronic network used for e-commerce transactions.

The Privacy Rules also provide the right to "opt out" of email marketing, and the company's privacy policy must address marketing and information collection practices. Further, the National Do Not Call (NDNC) Registry is effectively implemented by the Telecom Regulatory Authority of India (TRAI). TRAI has also established the Telecom Commercial Communication Customer Preference Portal, ie, a national data base containing a list of the telephone numbers of all subscribers who have registered their preferences regarding the receipt of commercial communications. Telemarketing companies may lose their license for repeated violation of DNC norms.

Last modified 28 Jan 2019
Online Privacy

There is no regulation of cookies, behavioral advertising or location data. However, it is advisable to obtain user consent, such as through appropriate disclaimers.

However, the IT Act contains both civil and a criminal offenses for a variety of computer crimes:

  • Any person who introduces or causes to be introduced any computer contaminant into any computer, computer system or computer network may be fined up to €694,450 (by an Adjudicating Officer); damages in a civil suit may exceed this amount. Under the IT Act, ‘computer contaminant’ is defined as any set of computer instructions that are designed:

    • To modify, destroy, record, or transmit data or programs residing within a computer, computer system or computer network, or
       
    • By any means to usurp the normal operation of the computer, computer system or computer network
       
  • Any person, who fraudulently or dishonestly makes use of the electronic signature, password or any other unique identification feature of any other person, is subject to a prison term of up to three years and a fine up to €1,390.
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Contacts
Vakul Sharma
Vakul Sharma
Managing Partner
T +91 11 47025460
Seema Sharma
Seema Sharma
Senior Partner
T +91 11 47025460
Last modified 28 Jan 2019