The Policy Wrap: ONDC set to democratise e-commerce; Spain fines Google €10 million for GDPR breach
The Policy Wrap is ADIF’s weekly newsletter on all things policy in the Indus Valley Ecosystem and beyond. Share your feedback and comments with us at amanat@adif.in.
Data Protection
Google fined €10 million by Spain for serious breaches of the European Union’s General Data Protection Regulation (GDPR)
Spain’s data protection authority, the Agencia Española de Protección de Datos (AEPD) levied a fine of €10 million on Google for serious breaches of the European Union’s General Data Protection Regulation (GDPR) which found it had passed information that could be used to identify citizens requesting deletion of their personal data under EU law, including their email address; the reasons given; and the URL claimed, to a U.S.-based third party without a valid legal basis for this further processing.
As well as being fined, Google has been ordered to amend its procedures to bring them into compliance with the GDPR — and to delete any personal data it still holds related to this enforcement.
The regulator also criticized Google’s form-based system for requesting the erasure of data. They contended that the system that required users to select an option for their request could result in circumventing the application of GDPR.
Information Technology (IT) Act
Hosting third-party content: Social media firms to face higher legal risks
The new Digital India Act (currently being drafted) seeks to incorporate all aspects covering cyber security, social media, digital services, personal data protection, etc, sources in the government said.
Currently, Section 79 of the IT Act provides an intermediary status to social media companies. This status provides them exemptions and certain immunity from liabilities for any third-party content and data hosted by them.
Sources said that there’s a thinking in the government that the safe harbour provisions under which intermediaries are exempt from legal liabilities are changing across the world and India should not lag behind. However, no fixed timeline or newer provisions replacing the existing ones have still been finalised.
If intermediary guidelines are tightened in such a manner that an intermediaries’ immunity from legal liabilities for hosting third-party content gets diluted, then going forward they might face higher legal risks.
Ruby Singh Ahuja, senior partner, Karanjawala and Company, said “Any dilution of the safe harbour provisions will not only be in direct contravention of the law laid down by the Supreme Court but will also not be in consonance with the law as it exists in Western parts of the world,”
Manjul Bajpai, a lawyer specialising in the telecom sector, said, “With perfect balance and without compromising the security of the nation, enough freedom should be given to the intermediaries to grow in this tech world. Technology needs to grow so that it benefits the general public.”
CERT-In issues FAQs on controversial April 28 directions
The Indian Computer Emergency Response Team (CERT-In) has released a set of clarifications on the April 28 directions.
The April 28 directions were issued to regulate reporting of cyber incidents, maintenance of ICT logs by service providers etc.
These FAQs have clarified the type of data that a company is expected to retain while recording ICT logs. These include firewall logs, SEIM logs, VPN logs etc.
The FAQs have also clarified that these directions would be applicable to anyone providing services to Indian customers. This is likely to include foreign companies.
Another controversial provision of these directions is the requirement for VPNs, crypto agencies etc. to maintain KYC on their customers.
E-commerce
How Open Network for Digital Commerce (ONDC) is all set to democratise e-commerce in India
In this op-ed, Tushar Gupta argues that the ONDC aims to accomplish ease of transacting for the smallest of sellers and buyers, by using a set of open protocols that will govern the interoperability between the apps on the buyers’ and sellers’ sides.
The government’s role here will not be of creating an app for the buyer or seller, but by creating the open protocol or gateway around which several such apps can be built by third-parties, as was the case with UPI as well. Thus, as long as the buyer and seller, both, are visible, it would not matter which app they use to conduct the transaction.
Benefits to sellers are as follows:
One, they get access to more buyers and attain greater discoverability at a fraction of the cost. Compare listing one’s business on five different apps against one network, and therefore, the barriers to listing one’s business online will come down.
Two, given they are visible on a network with several seller and buyer apps, they are not bound by the regulations of any one platform, as is the case for businesses working with Amazon or Zomato.
Three, the margins will improve, for the commission will be out of the question. Lastly, there is potential for the growth of value-added services, especially in the logistics sector.
Similarly, buyers get more options to choose from, better pricing, and access to the local retailers who would otherwise be absent from the likes of Amazon or Reliance
Dunzo, PhonePe among 24 e-commerce firms joining India's open network
Two weeks after the launch of the Open Network for Digital Commerce (ONDC) pilot, as many as two dozen companies, including Flipkart-backed logistics provider Ekart Logistics, hyperlocal quick commerce company Dunzo, and digital payments company PhonePe, are in the process of integrating with the network, as per sources.
Government officials believe that most e-commerce platforms will eventually adopt the network, considering the business proposition ONDC has to offer.
Paytm Mall pivots to build on ONDC as primary focus, explore exports scope
Paytm E-commerce, the parent company of Paytm Mall announced that it will pivot to Open Network for Digital Commerce (ONDC) as its primary focus and explore opportunities in export business in place of traditional physical goods e-commerce. Alibaba and Ant Group exit Paytm Mall as they did not want to be part of the pivot as e-commerce is a very competitive and a non-core sector for them in India
Competition Commission of India (CCI)
CCI's recent moves causing panic amongst small online sellers
CCI’s recent moves highlight a shift in their interpretation of ‘relevant market’ to define offline retail as a separate relevant market altogether as opposed to both online and offline retail making up the ‘relevant market’ which was their stance over the last 7-8 years.
This is especially problematic because it subjects India’s growing online ecosystem to erratic interpretations of law, something that has plagued the country and has had an adverse effect on foreign investment sentiments.
These developments to regulate the retail space by CCI has shaken the entire MSME community to re-evaluate the ease of doing business online.
To drive further discussion around this, India SME Forum conducted a roundtable comprising bureaucrats, industry leaders, and legal experts, to discuss how the regulators must desist from singling out online sellers in an arbitrary manner and highlight the need for a level playing field between all retail players, offline as well as online.
The Competition Commission of India and the competition law will get a facelift soon
The government is set to overhaul the Competition Act in the monsoon session of Parliament and revamp the anti-trust watchdog Competition Commission of India (CCI) to regulate India’s booming digital economy better.
The Ministry of Corporate Affairs has prepared the amendments, and inter-ministerial consultations are on before moving a bill to the cabinet for its clearance. As per a source, legislative changes shall include the introduction of new criteria for merger regulation and the deal value, which is not in the current formula.
App Store Ecosystem
Apple’s new rules let apps raise subscription prices automatically
Apple introduced a new set of rules to govern auto-renewing subscriptions on the App Store. Now, instead of asking users to agree to any subscription price increases, developers will be able to roll out a price increase without the user’s explicit consent. The feature feels somewhat anti-consumer, as it allows developers to simply inform customers they’ll be charged more, not requiring the customer to opt-in to the higher pricing.
The company also says users will be warned of the price increase in advance via email, push notification and a message within the app. And Apple will notify users of how to view, manage and cancel subscriptions if they don’t want to pay more.
Apple’s position on the matter is that it could save consumers the hassle of having their subscriptions automatically cancelled just because they didn’t see the notification or email that asked them to opt in to the price increase. However, there is also a possibility that this change could enable unscrupulous developers and scammers to better profit from their victims. Although Apple reviews apps for adherence to its App Store policies as part of its vetting process - there are still a number of apps operating on the App Store that are leveraging fake reviews to give their app the appearance of being well received in order to scam users out of their money.
Overall, some developers may welcome Apple’s latest change to save themselves the trouble of having to gather consent for smaller price changes, others are likely worried about the potential for abuse — particularly because that abuse could have long-term negative impacts on consumers’ willingness to subscribe to apps in the first place.
Startup Ecosystem
Key Takeaways from PM Narendra Modi’s address at Madhya Pradesh Startup policy Launch
Prime Minister Narendra Modi on Friday virtually inaugurated Madhya Pradesh’s ‘Startup Policy and Implementation Plan-2022’ and said his government has given a fillip to the startup sector. The MP startup policy aims to provide financial assistance, institutional support, single-window clearance, infrastructure and support in government procurement policy and marketing. The state has 1,900 registered start-ups, 800 of which are run by women entrepreneurs.
Speaking at the event PM Modi stated “In 2014 there were around 300-400 start-ups and there was not much buzz about it, but today there are about 70,000 recognised start-ups and every 8-10 days a new unicorn is made in the country.
United States-based tech accelerator FalconX launches programme for Indian startups
US tech accelerator FalconX has launched its flagship five-week global immersion programme to take Indian entrepreneurs to the US. The objective is to transform early-stage ventures into growth-stage startups.
The programme will have a cohort of startups focused on the B2B space supported by 40 mentors and subject matter experts. The programme culminates in a technology day where the top three startups get $100,000 each in funding.