New data protection bill draft: Tough times ahead for digital marketers?

Among other things, the draft proposes that firms use consumer data only for the original intended purpose

by Team PITCH
Published - November 25, 2022
5 minutes To Read
New data protection bill draft: Tough times ahead for digital marketers?

The government has come up with a new draft for its data protection bill, three months after the withdrawal of the previous draft. The proposal, which has been under constant scrutiny from public and industry experts, has since brought up a bunch of opinions, with experts suggesting that it might bring tough times for digital advertisers.

Privacy has been a subject of discussion between governments and corporates for years. The authorities have always been skeptical about the usage of data by big firms. They have tried and tested a number of methods to keep a check on personal data landing into the hands of tech companies, ad agencies and corporates. In the same direction, the new draft proposes that companies use consumer data for their original purposes only, seeks accountability from firms on personal data of the users and stops storage of data with companies by default. Hefty penalties are also in store for companies breaching certain rules.

“There are multiple norms here. The new draft has mentioned that the data can't be stored beyond a point of time. There has to be proper consent and approval done from the customer. This will definitely have a negative impact in the digital ecosystem as a whole, because, if you look at digital media as a company or if you look at digital advertising spends, they are more driven by CPM CPV or conversion site. Digital advertising is preferred by many as the ROI of the medium is high because you can monitor your customer, and basis that, predict what he or she will purchase or consume.”

“So the new bill, if implemented in this form, will definitely have a severe negative impact for digital advertising as a whole. Data will not be available. Advertisers may not be willing to increase their spends on digital because they don't know the consumption patterns of particular customer. Things are still very uncertain in terms of what will be the large-scale impact on companies, but prima-facie it looks that digital advertising will take some sort of hit and the companies may not be able to advertise just as they used to.”


Why does it concern the general public?

As a consumer, everyone has come across a time when their search on a website would show them advertisement of similar products on a completely different platform. For others, browsing of social media accounts means giving out very intimate details of their life online. Shopping websites store bank account details for payment, which if mishandled, can lead to a plethora of problems for the consumers. With such large and important data readily available on the internet, it is imminent for government bodies to take steps towards shielding personal data of their citizens.

Says Taurani, “I think the data protection bill is the need of the hour.  Customer’s perspective with data is that a lot of privacy is getting hampered. So, I think the customer should be given a choice whether or not he or she wants to share what they are up to in terms of your consumption and your usage. Data protection will ensure that the data is not taken from the customer without their consent, which is, I think, a fair deal. This is happening globally as well, wherein a lot of the consumption happens right now on internet, and lot of data is actually extracted from the customer which can be misused.”

India’s latest draft bill comes at a time when governments across the world are coming up with new laws to protect the public’s data. Europe, China and USA have over the years set rules and pulled up tech companies which did not comply with such rules.


Draft Bill: Yay or Nay?

Experts in the field have taken to social media to share their thoughts on the new draft. Bharat Khatri, Chief Digital Officer, APAC, Omnicom Group, in his LinkedIn post, says, “Glad to see that finally our govt has released the updated version of personal data protection bill last Friday which is quite simple and progressive this time. And most importantly not replicating the European GDPR version but charting a path of its own considering the local challenges and requirements.

“I’m super happy to see how an opt-out option & erasure of personal data by default when it’s no longer necessary for the purpose for which it was processed is being placed to safeguard all of us from daily spam calls & messages. And big thumbs up for acknowledging the processing of children’s data as a separate clause with clear guidelines on parental consent & no exceptions given to track behavioral data for targeting direct ads,” he mentions.

Hareesh Tibrewala, joint CEO of Mirum India, is also in support of the new decision “Personal data privacy has become a matter of big concern for consumers. Hence the data protection bill is a step in the right direction. Setting up a framework for collecting and using personal data will create greater confidence with the consumer that the data being shared is being only for the designated purpose, and actually be beneficial for the industry as a whole.

One interesting feature of the bill is setting up a regulatory body like the Data Protection Board. Also allowing cross border transfer of personal data, basis specific approval, will bring relief to global businesses like social media networks and others. In event of any breach of the Act, there are no criminal penalties. However, there are substantial commercial penalties. Also processing of children’s data requires verifiable consent from parent or guardian, which is a very welcome feature of this bill.”

Published last Friday for public consultation, the IT ministry will hear public views on the proposal until December 17.