MNCs may be asked to store data locally

New Delhi: E-commerce and social media companies may be asked to store user data exclusively in India, according to a draft national policy for the e-commerce sector.

This is likely to impact companies like Amazon, Facebook, WhatsApp, Twitter and Instagram among others.

Moreover, the government could also consider an amendment in the Companies Act so as to facilitate founders to have control over their ecommerce companies, despite their small shareholding, said sources. This is likely to have impact on Flipkart, which is being acquired by US retail giant Walmart. Traders and association of RSS have opposed the deal saying it will threaten small traders.  

Also the daft proposes that mergers in the e-commerce sector, even smaller that potentially distort competition will be compulsory be examined by CCI.

“Data generated by users in India from various sources including e-commerce platforms, social media, search engines etc,” would have to be stored exclusively in India, the draft said, adding that the e-commerce industry could be given time to “adjust before localisation becomes mandatory.”

It also said the government “would have access to data stored in India for national security and public policy objectives subject to rules related to privacy, consent etc.”

It suggested that data generated by a consumer could be permitted to be portable amongst platforms in India as per the consumer’s request.  

Further, a level-playing field would be provided to domestic players by ensuring that foreign websites involved in e-commerce transactions from India also follow the same rules.

The draft has suggested setting up of a separate wing in the Directorate of Enforcement to handle complaints related to implementation of guidelines related to foreign direct investment in the e-commerce sector. Bulk purchase of branded goods, especially mobile phones, which lead to price distortions in market place may be banned.

Also the draft has proposed mandating that home-grown card network RuPay be included as a payment option for online transactions.

Started in 2012 by a company owned by 10 local and foreign banks, RuPay competes with payment firms Visa and MasterCard.

Last week, draft of Personal Data Protection Bill, 2018 too had proposed that “critical personal data” of Indians will have to be processed only  in India.   

However, the Central government will determine categories of sensitive personal data which are critical to the nation having regard to strategic interests and enforcement requirements.  

Other types of personal data (non-critical) will be subject to the requirement to store at least one serving copy in India, according to the Personal Data Protection Bill.