Opinion
| Implications of data mirroring
It remains to be seen whether such a policy will backfire when it
comes to the potential threat of data colonialism
Data is the new
oil and a driver of growth and change. Indeed, India is a supposed to become
data rich before becoming economically rich. This digital growth is being
pushed by large foreign digital companies. They are largely fuelled by the data
of their users. And they are being welcomed by the establishment as is evident
by the visits of the prime minister and Union information technology minister
to Silicon Valley over the past few years as part of the Digital India
campaign.
Important sectors such as e-commerce,
social media, digital entertainment, online communication, and information and
communication technology (ICT) hardware in India are predominantly served by
foreign companies, or domestic companies funded by foreign capital.
Indian users today are
accessing digital technology-driven services not only within India’s national
boundaries, but also outside its jurisdiction. Consequently, these foreign
service providers are free to process the personal data of millions of Indians
within their own shores. The advancement of digital tools and technology in
areas such as artificial intelligence (AI), has enabled them to monitor and
profile user behaviour, preferences and even daily routines, granting them the
potential power to influence their decisions through targeted communications.
Many experts have been ringing the alarm bells
for the past few years, warning the government of digital colonialism by such
companies. Data is now considered a strategic asset by many, and data driven
network effects coupled with user feedback loops have given first mover
advantage to the more developed western world. The data processed by these
companies is not only used offshore to track and profile users, but is also fed
as fuel into modern technologies like AI and the Internet of Things (IoT),
which are touted to be the drivers of modern manufacturing, service delivery
and governance. Perhaps that’s why it is Silicon Valley that is expected to
lead the way in researching, implementing and controlling digital technologies,
earning it the reputation of being the new Rome.
Recognising the gravity of
the issue, the Srikrishna committee in its draft data protection bill has
rightly observed that the freedom to share personal data in the digital economy
works selectively in the interests of certain countries that have been early
movers. These countries can support a completely open digital economy without
any detriment to their national interests by virtue of their technological
advancement. It goes on to state that popular websites owned by foreign
entities refuse to provide data to Indian law enforcement agencies in many
instances. It has also flagged other related critical issues in the realm of
personal data protection and data sovereignty, such as preventing foreign
surveillance and fostering AI in India, all of which need to be addressed.
However, it remains to be
seen whether the bill will backfire with respect to the potential threat of
data colonialism.
The path recommended by the committee to
accomplish the feat is mandating local storage of a copy of user’s data, or
data mirroring, something which has not gone down well with its critics.
Contemporary public discourse interprets digital colonialism as a large global
economy wherein small local players are left out. It has also been argued by
industry players, academia and consumer groups that mandating data mirroring
will raise entry barriers in the Indian market and adversely impact a variety
of smaller domestic stakeholders, such as start-ups and micro, small and medium
enterprises .
Valid concerns in this
regard are based on the premise that large foreign companies will be able to
mobilise the requisite resources to invest in setting up their data centres
(DCs) within India, though the same may not be possible for smaller domestic
companies. The possible enhanced costs of setting up or renting such
infrastructure along with the non-availability of cheaper foreign cloud
services may affect their business interests. It may also impact their access
to the use of the latest technology.
Such entry barriers, coupled
with fears of potential long-term adverse impact on innovation and economic
growth, may deepen the existing issues of monopolisation of data and the
digital economy, leading to enhanced risks of digital colonialism.
Though with the right intention, it seems that
the committee has taken the most obvious path to achieve data sovereignty
without exploring other and possibly better alternatives.
The observation of the
committee must be treated as a recommendation—one that should be judged from
the perspective of India having to carefully balance the possible benefits of
localisation with the costs involved in mandating such a policy.
Accordingly, there is a need
to do a regulatory impact assessment or cost-benefit analysis (CBA) of the
proposed data mirroring mandate before its enactment and implementation. This
need is further exacerbated considering the committee’s observation that there
was no conclusive evidence presented to them demonstrating a CBA on the above
arguments and counter-arguments.
This effectively means that though a draft law
has been formulated, it is yet to be determined whether data mirroring will do
more harm than good.
Pradeep s. Mehta is the secretary general of
CUTS International.
Sidarth Narain contributed
to this article.
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at theirview@livemint.com
