Summary by: Deepro Guha, Senior Research Analyst, TQH
In partnership with The Print and Network Capital, TQH organised a series of online discussions on ‘Unpacking Non-Personal Data’, bringing together lawyers, tech policy experts, investors and political voices to deliberate on the proposed framework for non-personal data (NPD) governance. The first discussion focused on defining non-personal data. The second looked at the impact of the proposed provisions on the innovation ecosystem in India and the third deliberated on the question – is data a national resource?
For the third discussion on 8th August, 2020, Mr. Baijayant ‘Jay’ Panda (National Vice President, BJP) was in conversation with Aparajita Bharti (Founding Partner, TQH). This session focused on data being viewed as a national resource and touched upon the positive and negative implications of getting Big Tech to share non-personal data with startups as envisaged by the Non-Personal Data (NPD) Committee Report.
This piece captures the essential aspects of the above discussion. For details on other discussions in the series, please follow the links below:
Discussion 3: Is Non-Personal Data a national resource?
Q.1 Who owns non-personal data?
A.1 Mr. Panda acknowledged that this question is one of the biggest questions that confronts modern economies today. The question is relevant because both big companies and governments today collect large amounts of data. Individuals have, for convenience sake, given a large amount of data about themselves to companies and the government, for regulation and governance, has also been collecting data.
Before answering the question, Mr. Panda clarified that he would be speaking only of raw (unprocessed) non-personal data. He differentiates between data which is merely collected as opposed to data which is collected and worked upon (an aspect that would bring in elements of intellectual property rights). With regard to raw data, he said that the question around ownership still remains to be answered; it is not obvious whether the processor should own the data, or the community or the government. He added that India is at the cutting edge of this debate, and such a debate is expected to rage all over the world in the times to come.
Mr. Panda spoke about the example of the data collected by the census. He asked who this data should belong to? Can people say census data should not be shared because they are the owners of the data they have provided? Such questions will need to be answered to opine whether data is a national resource.
Q.2 Will mandatory sharing of data inhibit innovation?
A.2 Mr. Panda spoke of the libertarian world view and the socialist world view and how these are extreme positions vis-à-vis ownership of property. He said we would need to find a middle ground to these viewpoints. He gave the examples of oil monopolies, telecom monopolies etc. which were broken up in the USA in the past to check market imbalance. He also gave the example of net neutrality regulation in India, wherein it was concluded that just setting up infrastructure shouldn’t allow companies the authority to monopolize access to the customer. He added that the NPD Report does not provide for nationalization of data but provides a regulatory structure to create a market for data.
Q.3 Should the Competition Commission of India (CCI) regulate data imbalances in the market, or should there be a separate regulator?
A.3 Mr. Panda again cited the example of the oil/telecom monopolies and the net neutrality issue and brought out the difference between the two, in that, in the case of oil/telecom companies, it was the competition regulator which broke up the monopoly but in the case of net neutrality, it was FCC (USA) or TRAI (India) that examined the issue. He said the reason for this was that specialized regulators are required for new technological sectors because technology is evolving so fast. So even if there are overlaps between different regulators, there need to be specialized regulators when it comes to technology related sectors.
Q.4 Is any data really raw? Given there are so many different types of industries collecting so many different types of data, who decides which data is raw or processed for any industry?
A.4 Mr. Panda stated his preference for free markets but not for absolutely unregulated free markets. He was of the opinion that slicing/dicing of data by companies counts as processed data, but some data like simple locational data would be an example of raw data. He said that the debate on what is raw and what is processed will hopefully get settled going forward through extensive discussions, but the NPD Report has set a good tenor for us to start thinking about these questions.
Q.5 What will be the implications for India’s foreign and trade relations in case India mandates sharing of data?
A.5 Mr. Panda said that this will depend on how the rest of the world decides to go forward. However, India’s move seems rational in the current context. He gave examples of breaking of monopolies in other sectors in the past and how that didn’t prevent companies from coming to India, nor did TRAI’s net neutrality regulations prevent internet companies from operating in India. He also gave the example of Big Tech initially opposing GDPR and data protection regulations around the world but eventually making peace with the regulations.
Q.6 What are the privacy concerns related to anonymized data sets, especially given the concerns around de-anonymization?
A.6 Mr. Panda talked about the leeway we have all agreed to give to privacy concerns to operate in the modern world by giving examples of Google maps, airport scanners etc. He opined that a black and white situation in case of privacy is not possible and 100% privacy can never be ensured. He added that it will have to be an ongoing effort to ensure as much privacy as possible while providing for appropriate regulation. He cited the PGP (pretty good privacy) encryption principle in support of his argument by saying that it wasn’t a cosmic standard of privacy, but a “pretty good” standard. He said that while some anonymity can be ensured, there will always be crooks trying to break it. Therefore, even though perfect anonymity may not be possible right now, we should still attempt to regulate the sector to the best of our ability and continue to increase protections to privacy as per available technology.
Q.7 Should there be legal limitations on usage of shared data by startups?
A.7 Mr. Panda said that the monetization of data should be based on private effort and proprietary knowledge used on such data. He added that monetization would be important for innovation and can actually run both ways (Big Tech to startups and vice versa).
In terms of legal limitations on usage of shared data, he was of the opinion that we are moving too far ahead of the argument; saying that data will only be shared and given to startups may be a false assumption and data may in fact be shared at all levels. Taking a call on such things at this stage will be difficult because the definitions of raw and processed haven’t even been decided as yet; these issues will need to resolved first before we can discuss advanced issues.
Q.8 Why specifically target the oligopolistic market in tech when other industries also have the same structure?
A.8 Mr. Panda spoke about certain natural oligopolies like oil. He said that the same approach cannot be adopted for every sector/ industry. There has to be a balance between scale and competition, and the means to do that will be industry-dependent. While some concentration of market power may happen, access needs to be given to startups in the tech field to allow them to get a foothold in the rapidly evolving sector.
Q.9 How do you fire up innovation in startups? What about California where there is no mandated data sharing but still lots of innovation?
A.9 Mr. Panda said that, “Nothing succeeds like providing a level playing field.” He also spoke of dangers of overregulation and how regulators should be enablers and not enforcers. He highlighted the need to ensure setting up of infrastructure as the top most priority for tech regulators. He said that California has succeeded in providing infrastructure, knowledge and institutions to fire up innovation. India is trying to do the same; it already has close to 20 unicorns and needs to continue making ease of doing business simpler to further fire up innovation and investment.
Q.10 What is your view on the issue of there being too many proposed data regulators? Would this thwart EODB?
A.10 Mr. Panda started by saying that there can be a problem of too few or too many regulators. He gave the example of the lack of regulation in broadcasting 30-40 years back – a lot of time was wasted in not regulating a fledgling industry. He said a balance will have to be maintained while looking at the number of regulators. He added that there will mostly be an overlap between regulators’ powers and duties, such as in venn diagrams, but this is not necessarily bad. What we should look to avoid is significant overlap.
Q.11 How do we incentivize data sharing by Big Tech?
A.11 Mr. Panda said incentives would definitely play a part, but cannot be the only solution. He added that a lot of industries ask for self-regulation but this does not always work out, either for consumers or smaller players. To answer this question, we should go to the core issue: who does raw data belong to – the collector of the data, or its source? If it belongs to the collector, then there should be no regulation and only incentives, but if it belongs to the source then only incentives would not serve the purpose.
Q.12 While anti-trust is an issue everywhere, why haven’t other countries gone down the path of sharing data?
A.12 Mr. Panda said that other countries are also looking into this issue and used the example of the EU. He said exploration of this approach started with governments questioning whether they can use data to improve policy making (e.g. preventing crime, improving health etc.). He added that other countries are looking at it, but India is clearly at the forefront on this issue.
Q.13 Do you think India will be seen as overzealous when it comes to regulation of data?
A.13 Mr. Panda opined that India should shed its inhibitions about being a global leader while at the same time not letting hubris get to it. He talked about the scale and technological edge that India has and said that India must utilize this, while at the same time considering all opinions of relevant stakeholders.
Q.14 What is the future path India should take with respect of regulation of data and what would be a legitimate timeline for such a path? Should the PDP Bill be passed first? Should it mention NPD?
A.14 In Mr. Panda’s opinion, we are taking the right path by starting a conversation on the subject. We are hearing all opinions and we don’t want to penalize innovation nor do we want to inhibit new startups. We have to look at what the world is doing and how it is going about regulating data, and take the best models applicable to India. He also spoke about the dangers of trying to get to a perfect system in one go and said that often “perfect is the enemy of the good”. He suggested that we should not hesitate to proceed while continuing to learn and adopt new ways to improve data regulation; we can’t wait forever till every ‘I’ is dotted and ‘T’ is crossed and we must start off with the current knowledge and improve as we go forward.