Guide to India’s Digital Personal Data Protection Act (DPDP)

In this guide:

  1. Highlights of the DPDP
  2. Impact on businesses
  3. Get help from Privacy Bee

Highlights of the Digital Personal Data Protection Act (DPDP)

India first introduced its Digital Personal Data Protection Act (DPDP) in 2019, which passed and is now active. The DPDP applies to any instance in which digital personal data is collected or processed due to goods and services offered in India. This includes both data collected online or collected offline and then later digitized.

This significant piece of legislation was created to protect individuals’ personal data in the digital age. The act addresses various aspects of data protection, privacy, and data processing, establishing a more robust framework innovating upon India’s existing legislation. Under the DPDP, personal data can only be processed for a lawful purpose once the individual has consented, and the data manager is obligated to maintain the accuracy of collected data while taking reasonable measures to keep it secure. There is an exception for “certain legitimate issues” outlined in the act which allows a processor to collect data without user consent. However, this is a narrow exception that should not be counted on.

The central government of India is also charged with establishing a Data Protection Board to review non-compliance cases and deliver penalties and fines to any organization failing to meet the provisions within the act. Critics of the act argue enforcement challenges exist today and the government agency exemption paired with consent language ambiguity equate to loopholes for some organizations, but many of these concerns will likely be addressed as the law is amended, updated or additional powers are granted to the Data Protection Board over time.

The DPDP is a step in the right direction for Indian citizens and establishes the following provisions for data protection:

  • Data Processing Principles: The DPDP sets out principles for the lawful processing of personal data. It emphasizes that data must be processed fairly, lawfully, and transparently. It also specifies the purposes for which data can be processed and mandates that data should be accurate and up to date.
  • Consent: One of the fundamental principles of the DPDP is obtaining explicit and informed consent from individuals before collecting and processing their personal data. This consent must be clear and easy to withdraw if and when users change their mind later.
  • Extraterritorial Scope: Data processing outside of India, for services and goods offered in India, must still comply with all of the provisions in the DPDP.
  • Data Protection Board: The DPDP establishes the Data Protection Board of India as the regulatory body responsible for overseeing and enforcing data protection laws.
  • Data Subject Rights: Individuals are empowered with certain rights, including the right to access, correct, and erase their personal data. They also have the right to know who has access to their data and for what purposes.
  • Data Fiduciaries and Data Processors: The act distinguishes between data fiduciaries (entities that collect and determine the purpose of data processing) and data processors (entities that process data on behalf of fiduciaries). Both are subject to regulatory oversight.
  • Data Breach Reporting: The DPDP mandates the reporting of data breaches to the DPA and affected individuals. Timely reporting is crucial to ensure accountability and transparency.
  • Cross-Border Data Transfer: The act includes provisions for cross-border data transfers, requiring data fiduciaries to adhere to specific safeguards when sending data outside of India.
  • Government Access: The act allows government agencies to access personal data without a court order in certain situations, raising concerns about potential misuse of this provision and its impact on businesses that handle sensitive data.

Prior to the DPDP, India did not have a standalone law on data protection. By implementing this major piece of legislation, India has the potential to bring about significant changes in how personal data is handled and protected in the country as it aims to establish a robust framework for data protection, privacy, and data processing.

Source: The Digital Personal Data Protection Bill, 2023 Text

Impact on businesses

Maintaining compliance with the DPDP will be the biggest challenge for businesses, but it isn’t the only one. When making data privacy a priority by increasing transparency and accountability, an organization can differentiate and increase consumer trust with their brand. This is one of the biggest public concerns today, so businesses who get ahead of the game will be able to secure immense value by making data privacy a priority today.

In general, the DPDP impacts on businesses are as follows:

  • Compliance Burden: The DPDP imposes significant compliance requirements on businesses. Every organization collecting or processing personal data must implement robust data protection measures, secure explicit consent, and report data breaches promptly. This may lead to increased compliance costs and administrative burdens, particularly for smaller businesses.
  • Data Localization: The act establishes that critical personal data must be stored and processed within the borders of India. This provision has been a subject of debate and concern among foreign companies, and internal critics worry it could hamper international trade.
  • Innovation and Data-Driven Services: Some businesses that rely heavily on data analytics and personalized services may face challenges in adapting to the act’s stringent data processing restrictions. This could impact the development of data-driven technologies and innovation in the digital space.
  • Data Fiduciary and Processor Roles: The act distinguishes between data fiduciaries (entities that collect and determine the purpose of data processing) and data processors (entities that process data on behalf of fiduciaries). Both are subject to regulatory oversight, which may require businesses to review and potentially restructure their data handling practices.

Businesses marketing or selling goods and services in India should also keep an eye on the Data Protection Board and be prepared to comply with any new mandates they issue. It is likely there will be more prescriptive requirements issued to ensure proactive cybersecurity measures are taken to secure data, and that immediate notification occurs in the case of a data breach. Right now, much of this is a little too general to be actionable for businesses, so it’s best to communicate too much rather than potentially face painful fines.

When in doubt, err on the side of having too much coverage. Regulations in place around the world hint at the direction India is going, which means it can never hurt to do some of the following actions before they’re specifically mandated:

  • Conduct a data mapping exercise to document data flows and track how data moves through your organization, including its collection, storage and sharing.
  • Develop clear policies and procedures for data retention, data subject rights, breach response, and more.
  • Train employees on data protection policies and their roles in maintaining compliance, along with best practices to avoid falling victim to a data breach.
  • Display privacy notices prominently that inform individuals about data processing activities, their rights, and (if applicable) how to contact your organization’s DPO.
  • Collect only necessary data and then protect it with data encryption, access and governance controls, and regular compliance audits.
  • Record all efforts and create a data breach response place, just in case anything does go awry, so it’s easier to demonstrate careful stewardship and inform stakeholders when necessary.

With these measures in place, businesses can rest assured they have the processes and documentation to ensure compliance with the DPDP. The knock-on effects will only help increase customer trust and loyalty over time as well, so it can’t hurt to start making these changes today.

Get help from Privacy Bee

In the ever-evolving digital landscape, safeguarding the personal data of customers and employees while imparting knowledge about data usage has become an obligatory endeavor for businesses offering online services in India. Around the world, new regulations are continuously being introduced, each with a heightened emphasis on stricter opt-in/opt-out policies. These regulations empower consumers by granting them the right to scrutinize and delete their personal data, ultimately augmenting the accountability of organizations in the realm of data protection.

Within a sprawling organization, it is practically impossible to undertake this colossal task for every employee single-handedly. Nevertheless, the identification and elimination of such information holds profound significance, serving as a deterrent to cybercriminals while diminishing the attack surface and mitigating the risk of a data breach. This is precisely where Privacy Bee steps in, streamlining the time-consuming processes of monitoring and deleting employee personal data, enabling business leaders to exercise more efficient control across the entire team and beyond.

Privacy Bee’s impact extends beyond the boundaries of your organization, encompassing vendors to ensure that they aren’t a weak link in your security defenses. Even with robust cybersecurity measures in place, it remains imperative to scrutinize the data privacy management practices of all third-party vendors. If your organization is already engaged in risk assessments and vendor surveys, kudos! However, it is worth noting that the most likely vulnerability for a vendor lies with inadequate data management.

By adopting a proactive approach, Privacy Bee launches a counteroffensive against the exploitation of your most sensitive data, reinforcing your External Data Privacy on multiple fronts.

In the vast landscape of the internet, Data Brokers and People Search Sites have emerged as key players in the multi-billion-dollar surveillance industry. They profit from the sale of your organization’s information, often passing it on to obscure and uncontrollable entities. The consequences of having private data exposed on the web are profound, posing severe threats when they fall into the hands of malicious actors. A single data breach can cause a cascade of adverse consequences, including extensive productivity losses, costly remediation efforts, and the unfortunate recurrence of breach events—a predicament that affects a majority of businesses after an initial breach. Such incidents can trigger a chain reaction, detrimentally impacting your bottom line in the short term, eroding brand value, and diminishing customer trust in the long run. These ramifications extend to high employee turnover due to poaching and a notable decline in productivity attributed to increasingly sophisticated spam outreach.

Privacy Bee stands as your ally in the battle against external privacy threats. By meticulously locating every nook and cranny of the internet where your data resides and swiftly eliminating it, Privacy Bee bridges the data security gap. Furthermore, this process encompasses dark web monitoring and provides data breach notifications in case another company falls victim to an exploit, leading to the exposure of your information.

Our unwavering commitment is firmly grounded in the belief that privacy is an intrinsic human right, one that transcends political debates and negotiations. It is this steadfast commitment that drives Privacy Bee to diligently monitor user data for security vulnerabilities while holding the surveillance industry accountable. This accountability is enforced by compelling Data Brokers, People Search Sites, and over 150,000 additional websites to erase your stored data and opt out of further data collection.

Privacy Bee’s protective umbrella extends over a wide range of potential threats, including:

  • Data breaches
  • Spam emails
  • Telemarketing calls
  • Cyberstalking
  • Swatting
  • Doxxing
  • Blackmail
  • Identity theft

If you’re a business leader committed to securing both employees and customers, Privacy Bee empowers you to take control of your organizations most vital employee and customer data. In this era where privacy is critical, Privacy Bee stands as your steadfast partner in the ongoing battle to preserve your personal and organizational integrity.

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