Personal Data Protection Bill: What Happens When Government Acquires Data
One of the famous government-private corporation disputes over trade secrets in India is the time when George Fernandes as the industries minister in the post-emergency Janata government demanded that Coca-Cola Company hand over its formula to make its famous cola drink. The corporation, which treated the formula as a trade secret declined to do so and instead wrapped up its operations in India paving the way for the Janta government to launch Super-77, an Indian drink. Coca-Cola returned only many years later.
This story is relevant to the discussion on the Personal Data Protection Bill, 2019—which is currently being examined by a Joint Parliamentary Committee of Parliament—because Clause 91 of the Bill allows the government to acquire data from any corporation. The provision bears familiarity with other ‘eminent domain’ laws such as the Land Acquisition Act where the state may acquire private property for public purposes, on the payment of compensation to the owners of the property that is being acquired. The provision, in pertinent part, states that “the Central Government may, in consultation with the Authority, direct any data fiduciary or data processor to provide” any anonymised data to “enable better targeting of delivery of services or formulation of evidence-based policies by the Central Government” in a manner that is to be prescribed in the rules.
Why Government Wants Data From Corporations
While the accompanying notes on clauses – which are supposed to explain the provisions in the bill – are rather bland, it appears that the government aims to acquire private data sets to frame public policy and discharge its governance functions.
The private sector has access to enormous data sets that would be immensely useful for the government, even if the personal details of individuals are anonymised.
For example, Google Maps, Uber and Ola have immense datasets that would help city planners and the traffic police understand the flow of traffic in various Indian cities. Other useful datasets could include those held by healthcare diagnostic chains and hospitals which would be the key to developing the next generation of artificial intelligence for the healthcare industry and will be a necessary raw material for public-funded research institutes working in this area.
Surprisingly, this present bill is not the first or only law that allows the government to requisition data for the purpose of governance. The Collection of Statistics Act, 2008, arms the government with some rather draconian powers to acquire information from anyone in the country to compile statistics. That law, however, does come with a purpose limitation that allows the government to use the collected data only for statistical purposes and nothing else.
Does Government Owe Any Compensation For Acquiring Data?
The most obvious question that presents itself in the context of Clause 91 is whether the central government is required to pay any compensation to the corporation from which it is acquiring data. In the context of property, especially the land reforms, the issue of compensation and whether it was required to be ‘reasonable’ was at the center of a noisy debate between landlords, the Supreme Court, and the central government. At the time the right to property was enshrined as a fundamental right in Article 19(1)(f). This right was usually read along with Article 31 which required compensation to be paid for property that was acquired by the government.
The post-emergency Janata government deleted both Article 19(1)(f) and Article 31 from the Constitution in 1978. These rights were replaced with a new Article 300A which was introduced into the Constitution and placed outside the fundamental rights chapter. This provision merely states that a person cannot be deprived of their property without the authority of the law but is silent on the issue of compensation. Similarly, Article 31 was replaced with a milder provision in the form of Article 31A, which does require payment of compensation if the land that is being acquired is under cultivation.
It is a different issue that statutes related to land acquisition still require the government to pay compensation for land that it acquires or uses. This is because land rights have been a very emotive issue and much of the activism by the left-leaning section of civil society has been geared towards the protection of land rights, be it in the form of the new Land Acquisition Act or the Forest Rights Act. Whether the Constitution still requires such payment of compensation for property that it acquires is up for debate.
Is Data ‘Property’?
The question, in the context of the PDP Bill, is whether a property right exists in data. The PDP Bill does not expressly confer the status of ‘property’ on data. Rather the draft law uses the conceptual framework of a ‘fiduciary’ relationship between the citizen and the corporation to bestow on the corporation a duty to protect the data, guided by the best interests of the citizen. Does this however prevent a court from protecting data within the ‘property’ framework or does data by its very nature completely evade the definition of ‘property’?
Contrary to common conception, property does not have to be tangible. Copyrights have been classified as property by Indian courts in some cases despite the Copyright Act never using the phrase “property”. In the public discussions leading to the PDP Bill, there were calls to classify data as property.
Although the Srikrishna Committee declined to go down the ‘property’ route, a court can fit data into one of the many definitions of property that appear in legal theory.
If this happens, the question is whether compensation is payable when the PDP Bill is itself silent on this aspect. These issues are bound to arise given the commercial worth of big datasets and there are no simple answers. As of now, it would appear that the government will not have to pay any compensation for these datasets. However, given the judicial gymnastics performed in the name of the Constitution, it could be argued that Article 300A requires any law acquiring private property to be ‘reasonable’ which could be translated into a requirement to pay compensation.
Is Clause 91 In Violation Of TRIPS Article 39?
A simpler question to answer is whether a provision like Clause 91 is legal in the context of international law. Although there is no international treaty on data protection, there is the Agreement on Trade-Related Aspects of Intellectual Property Rights. Apart from laying down norms related to patents and copyrights, TRIPS also protects information that has been maintained as a secret and which has commercial value because of its secrecy. Article 39 of TRIPS in pertinent part, states “Natural and legal persons shall have the possibility of preventing information lawfully within their control from being disclosed to, acquired by, or used by others without their consent…”.
There are no exceptions to this clause. At most, a contracting party to TRIPS may force the sharing of data, as a remedy to anti-competitive practices.
Clause 91 clearly pertains to data sets that could be classified as trade secrets in common parlance. The provision negates the rights of natural persons or corporations to maintain undisclosed information as a trade secret. Prima facie there appears to be a case to argue that Clause 91 of the PDP Bill, 2019 is contrary to Article 39 of TRIPS. Whether any other country, would be willing to haul India before the Dispute Settlement Body of the World Trade Organisation, especially in its current impotent state, is debatable.
Updated to correct an earlier version that erroneously referred to Clause 92, instead of Clause 91, of the Personal Data Protection Bill in some paragraphs.
T Prashant Reddy is a Bengaluru-based advocate and co-author of ‘Create, Copy, Disrupt: India’s Intellectual Property Dilemmas’.
The views expressed here are those of the author, and do not necessarily represent the views of BloombergQuint or its editorial team.