About

• The Digital Personal Data Protection Act, 2023 (DPDP Act) was enacted in 2023 for regulating the collection, storage, use and processing of personal data. 

Highlights of the Act

Applicability:  

• The Act applies to the processing of digital personal data within India where such data is: 
  • collected online, or 
  • collected offline and is digitised.  
• It will also apply to the processing of personal data outside India if it is for offering goods or services in India.  
• Personal data is defined as any data about an individual who is identifiable by or in relation to such data.  
• Processing has been defined as wholly or partially automated operation or set of operations performed on digital personal data. It includes collection, storage, use, and sharing.

Consent:  

• Personal data may be processed only for a lawful purpose after obtaining the consent of the individual. 
• Consent may be withdrawn at any point in time.  
• Consent will not be required for ‘legitimate uses’ including: 
  • specified purpose for which data has been provided by an individual voluntarily, 
  • provision of benefit or service by the government, 
  • medical emergency, and 
  • employment.   
• For individuals below 18 years of age, consent will be provided by the parent or the legal guardian.

Rights and duties of data principal:  

• An individual whose data is being processed (data principal), will have the right to: 
  • obtain information about processing, 
  • seek correction and erasure of personal data, 
  • nominate another person to exercise rights in the event of death or incapacity, and 
  • grievance redressal.  
• Data principals will have certain duties.  
• They must not: 
  • register a false or frivolous complaint, and 
  • furnish any false particulars or impersonate another person in specified cases.
• Violation of duties will be punishable with a penalty of up to Rs 10,000.

Obligations of data fiduciaries:  

• The data fiduciary (persons, companies and government entities who process data), must: 
  • make reasonable efforts to ensure the accuracy and completeness of data, 
  • build reasonable security safeguards to prevent a data breach,
  • inform the Data Protection Board of India and affected persons in the event of a breach, and
  • erase personal data as soon as the purpose has been met and retention is not necessary for legal purposes (storage limitation).  
• In case of government entities, storage limitation and the right of the data principal to erasure will not apply.

Transfer of personal data outside India:  

• The Act allows transfer of personal data outside India, except to countries restricted by the central government through notification.  

Exemptions:  

• Rights of the data principal and obligations of data fiduciaries (except data security) will not apply in specified cases.  
• These include: 
  • prevention and investigation of offences, and 
  • enforcement of legal rights or claims.  
• The central government may, by notification, exempt certain activities from the application of the Act.  These include: 
  • processing by government entities in the interest of the security of the state and public order, and 
  • research, archiving, or statistical purposes.

Data Protection Board of India: 

• The central government will establish the Data Protection Board of India.  
• Key functions of the Board include: 
  • monitoring compliance and imposing penalties, 
  • directing data fiduciaries to take necessary measures in the event of a data breach, and 
  • hearing grievances made by affected persons.  
• Board members will be appointed for two years and will be eligible for re-appointment.   
• The central government will prescribe details such as the number of members of the Board and the selection process.  
• Appeals against the decisions of the Board will lie with Telecommunications Dispute Settlement and Appellate Tribunal (TDSAT).
  • TDSAT was established in 2000 as a statutory body to adjudicate disputes and dispose of appeals to protect the interests of service providers and consumers of the telecom sector. 
  • At present, the Tribunal exercises jurisdiction over Telecom, Broadcasting, IT and Airport tariff matters under the TRAI Act, 1997, the Information Technology Act, 2008 and the Airport Economic Regulatory Authority of India Act, 2008. 
  • The Tribunal consists of a Chairperson and two Members appointed by the Central Government. The Chairperson should be or should have been a Judge of the Supreme Court or the Chief Justice of a High Court. 

Penalties: 

• The Act specifies penalties for various offences such as up to: (i) Rs 200 crore for non-fulfilment of obligations for children, and (ii) Rs 250 crore for failure to take security measures to prevent data breaches.  
• Penalties will be imposed by the Board after conducting an inquiry. 

Key Issues and Analysis

• Exemptions to data processing by the State on grounds such as national security may lead to data collection, processing, and retention beyond what is necessary. This may violate the fundamental right to privacy.
• The Act does not regulate risks of harms arising from processing of personal data.  
• The Act allows transfer of personal data outside India, except to countries notified by the central government. This mechanism may not ensure adequate evaluation of data protection standards in the countries where transfer of personal data is allowed.
• The members of the Data Protection Board of India will be appointed for two years and will be eligible for re-appointment. The short term with scope for re-appointment may affect the independent functioning of the Board.