The Personal Data Protection Bill, 2019: All you need to know

Anurag Vaishnav - December 23, 2019

Recently, the Personal Data Protection Bill, 2019 was introduced in Parliament. The Bill has been referred to a Joint Parliamentary Committee for detailed examination, and the report is expected by the Budget Session, 2020. The Bill seeks to provide for protection of personal data of individuals, create a framework for processing such personal data, and establishes a Data Protection Authority for the purpose. In this blog, we provide a background to the 2019 Bill, and explain some of its key provisions.

What is personal data and data protection?

Data can be broadly classified into two types: personal and non-personal data. Personal data pertains to characteristics, traits or attributes of identity, which can be used to identify an individual. Non-personal data includes aggregated data through which individuals cannot be identified. For example, while an individual’s own location would constitute personal data; information derived from multiple drivers’ location, which is often used to analyse traffic flow, is non-personal data. Data protection refers to policies and procedures seeking to minimise intrusion into the privacy of an individual caused by collection and usage of their personal data.

Why was a Bill brought for personal data protection?

In August 2017, the Supreme Court held that privacy is a fundamental right, flowing from the right to life and personal liberty under Article 21 of the Constitution. The Court also observed that privacy of personal data and facts is an essential aspect of the right to privacy. In July 2017, a Committee of Experts, chaired by Justice B. N. Srikrishna, was set up to examine various issues related to data protection in India. The Committee submitted its report, along with a Draft Personal Data Protection Bill, 2018 to the Ministry of Electronics and Information Technology in July 2018. The Statement of Objects and Reasons of the Personal Data Protection Bill, 2019 states that the Bill is based on the recommendations of the report of the Expert Committee and the suggestions received from various stakeholders.

How is personal data regulated currently?

Currently, the usage and transfer of personal data of citizens is regulated by the Information Technology (IT) Rules, 2011, under the IT Act, 2000. The rules hold the companies using the data liable for compensating the individual, in case of any negligence in maintaining security standards while dealing with the data. The Expert Committee in its report, held that while the IT rules were a novel attempt at data protection at the time they were introduced, the pace of development of digital economy has shown its shortcomings.³ For instance, (i) the definition of sensitive personal data under the rules is narrow, and (ii) some of the provisions can be overridden by a contract. Further, the IT Act applies only to companies, not to the government.

What does the Personal Data Protection Bill provide?

The Bill regulates personal data related to individuals, and the processing, collection and storage of such data. Under the Bill, a data principal is an individual whose personal data is being processed. The entity or individual who decides the means and purposes of data processing is known as data fiduciary. The Bill governs the processing of personal data by both government and companies incorporated in India. It also governs foreign companies, if they deal with personal data of individuals in India.

Will individuals have rights over their data?

The Bill provides the data principal with certain rights with respect to their personal data. These include seeking confirmation on whether their personal data has been processed, seeking correction, completion or erasure of their data, seeking transfer of data to other fiduciaries, and restricting continuing disclosure of their personal data, if it is no longer necessary or if consent is withdrawn. Any processing of personal data can be done only on the basis of consent given by data principal.

Are there any restrictions on processing of an individual’s data?

The Bill also provides for certain obligations of data fiduciaries with respect to processing of personal data. Such processing should be subject to certain purpose, collection and storage limitations. For instance, personal data can be processed only for specific, clear and lawful purpose. Additionally, all data fiduciaries must undertake certain transparency and accountability measures such as implementing security safeguards and instituting grievance redressal mechanisms to address complaints of individuals. Certain fiduciaries would be notified as significant data fiduciaries (based on certain criteria such as volume of data processed and turnover of fiduciary). These fiduciaries must undertake additional accountability measures such as conducting a data protection impact assessment before conducting any processing of large scale sensitive personal data (includes financial data, biometric data, caste, religious or political beliefs).

What is the grievance redressal mechanism if the above restrictions are not followed?

To ensure compliance with the provisions of the Bill, and provide for further regulations with respect to processing of personal data of individuals, the Bill sets up a Data Protection Authority. The Authority will be comprised of members with expertise in fields such as data protection and information technology. Any individual, who is not satisfied with the grievance redressal by the data fiduciary can file a complaint to the Authority. Orders of the Authority can be appealed to an Appellate Tribunal. Appeals from the Tribunal will go to the Supreme Court.

Are there any exemptions to these safeguards for processing of personal data?

Processing of personal data is exempt from the provisions of the Bill in some cases. For example, the central government can exempt any of its agencies in the interest of security of state, public order, sovereignty and integrity of India, and friendly relations with foreign states. Processing of personal data is also exempted from provisions of the Bill for certain other purposes such as prevention, investigation, or prosecution of any offence, or research and journalistic purposes. Further, personal data of individuals can be processed without their consent in certain circumstances such as: (i) if required by the State for providing benefits to the individual, (ii) legal proceedings, (iii) to respond to a medical emergency.

Is the Bill different from the draft Bill suggested by the Expert Committee?

The Bill has made several changes from the draft Bill. For instance, the Bill has added a new class of significant data fiduciaries, as social media intermediaries. These will include intermediaries (with users above a notified threshold) which enable online interaction between users. Further, the Bill has expanded the scope of exemptions for the government, and additionally provided that the government may direct data fiduciaries to provide it with any non-personal or anonymised data for better targeting of services.

In a follow-up blog, we will provide a detailed comparison of the key provisions of this Bill with the Draft Personal Data Protection Bill 2018, released by the Justice B. N. Srikrishna Committee.

Legislation

The Personal Data Protection Bill, 2019: How it differs from the draft Bill

Anurag Vaishnav - December 27, 2019

The Personal Data Protection Bill, 2019 was recently introduced in Parliament. The Bill has been referred to a Joint Parliamentary Committee for detailed examination, and the Committee is expected to submit its report by the last week of Budget Session, 2020. The Bill seeks to provide for the protection of personal data of individuals (known as data principals), and creates a framework for processing such personal data by other entities (known as data fiduciaries). It provides the data principal with certain rights with respect to their data, such as seeking correction, completion or transfer of their data to other fiduciaries. Similarly, it sets out certain obligations, and other transparency and accountability measures to be undertaken by the data fiduciary, such as instituting grievance redressal mechanisms to address complaints of individuals. Processing of personal data is exempted from the provisions of the Bill in certain cases, such as security of state, public order, or for prevention, investigation, or prosecution of any offence. The Bill also establishes a Data Protection Authority to ensure compliance with the provisions of the Bill and provide for further regulations.

As per the Statement of Objects and Reasons of the 2019 Bill, the provisions of the Bill are based on the recommendations of the report of the Expert Committee (Chair: Justice B. N. Srikrishna) which examined issues related to protection of personal data and proposed a Draft Personal Data Protection Bill, 2018.

In a previous blog, we provided a brief background to the 2019 Bill, explained why a Bill was brought for personal data protection and what are some of the key provisions of the Bill. In this blog, we look at how the 2019 Bill differs from the 2018 Draft Bill.

Table 1: Comparison of the provisions of the 2018 Draft Bill with the 2019 Bill

Provision	Draft Personal Data Protection Bill, 2018	Personal Data Protection Bill, 2019
Definition of personal data	Personal data pertains to characteristics, traits or attributes of identity, which can be used to identify an individual.	The Bill retains the definition and adds that such characteristics or traits will also include any inference drawn from such data for the purpose of profiling.
Sensitive personal data	Sensitive personal data includes personal data related to health, sex life, sexual orientation, financial data, passwords, among others. The Data Protection Authority can categorise any other personal data as sensitive personal data.	The Bill removes passwords from the category of sensitive personal data. The power to further categorise personal data as sensitive personal data will lie with the central government (in consultation with Data Protection Authority and the sector regulator concerned).
Rights of individual (data principal)	The data principal has certain rights with respect to their data such as obtaining confirmation on whether their data has been processed, seeking correction, transfer, or restriction on continuing disclosure of their data.	The Bill provides the right to erasure of personal data which is no longer necessary for the purpose for which it was processed, as an additional right for the data principal.
Non-consensual processing of personal data	Personal data may be processed without obtaining the consent of the individual on certain grounds. These include: (i) any function of Parliament or state legislature, (ii) if required by the State for providing benefits to the individual, and (iii) for reasonable purposes specified by the Authority, such as fraud detection, debt recovery, and whistle blowing.	The Bill removes the provision on any function of Parliament or state legislature as a ground for non-consensual processing of personal data. The Bill adds ‘operation of search engines’ as a reasonable purpose for which non-consensual processing of personal data may be allowed by the Authority.
Social media intermediaries	The draft Bill did not contain this term.	The Bill defines a social media intermediary as an intermediary which enables online interaction between users and allows for sharing of information. All social media intermediaries which are classified as significant data fiduciaries (fiduciaries with users above a notified threshold whose actions can impact electoral democracy or public order) must provide a voluntary user verification mechanism for all users in India.
Exemptions for the government for processing of personal data	The State is exempted from the provisions of the Bill while processing personal data in the interest of national security. However, such processing must be permitted by a law and must be proportionate to the interests being achieved. Further, such processing must be done in a fair and reasonable manner.	The government can exempt any of its agencies from any or all provisions of the Act, for processing of personal data in certain cases. These include: (i) in interest of security of state, public order, sovereignty and integrity of India and friendly relations with foreign states, and (ii) for preventing incitement to commission of any cognisable offence relating to the above matters.
Exemptions for manual processing by small entities	Transparency and accountability measures and certain other obligations will not apply to small entities. These are fiduciaries which: (i) have annual turnover below Rs 20 lakh (or such lower amount as prescribed), and (ii) did not process data of more than 100 individuals in any one day in the last year.	The Bill retains the exemption for small entities. However, it does away with the prescribed limits and allows the Authority to classify fiduciaries as small entities based on the annual turnover of fiduciary and the volume of data processed by such fiduciary.
Transfer of personal data outside country	One serving copy of all personal data should be stored in India.	The Bill removes the provision for mandatory storage of all personal data in the country. It provides that sensitive personal data must continue to be stored in India. Such data can be transferred outside India if explicitly consented by the individual, and subject to certain additional conditions.
Composition of Data Protection Authority of India	The chairperson and members of the Authority will be appointed by the central government on the recommendations of a selection committee. The selection committee will be comprised of: (i) Chief Justice of India or a Judge of Supreme Court as the chairperson, (ii) Cabinet Secretary, and (iii) an expert in field of data protection, information technology and related subjects.	The Bill provides that the selection committee will be comprised of: (i) Cabinet Secretary as the chairperson, (ii) Secretary, Department of Legal Affairs, and (iii) Secretary, Ministry of Electronics and Information Technology.
Offences and penalties	Under the Bill, offences such as: (i) obtaining, disclosing, transferring, or selling personal data in contravention of the Act, and (ii) re-identification and processing of de-identified personal data (data from which identifiers have been removed) without consent, are punishable with imprisonment.	Under the Bill, re-identification and processing of de-identified personal without consent is the only offence punishable with imprisonment.
Non-personal and anonymised personal data	No provision of the Bill would apply to non-personal data used by government for formulation of policies for digital economy, growth or security.	The Bill retains the provision and further provides that the government can direct data fiduciaries to provide it any: (i) non-personal data and (ii) anonymised personal data (where it is not possible to identify data principal) for better targeting of services and formulation of evidence-based policy.

Sources: The Draft Personal Data Protection Bill, 2018; The Personal Data Protection Bill, 2019; PRS.

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The Personal Data Protection Bill, 2019: All you need to know

The Personal Data Protection Bill, 2019: How it differs from the draft Bill

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