“One fundamental thing is that there is a belief now: data is the new oil. We’ve heard it two or three times even within the Policy.”

The #NAMApolicy discussion on the draft Policy on E-Commerce brought the focus towards breaking down the intent of the Government with the release of this Policy. While looking at the requirements of sharing data with Indian companies and and state authorities, participants got into explanations on whether and how sharing of data would help Indian entities. The discussion was supported by Amazon.

Data as a Resource – Finite?

Arjun Sinha of Cantor Associates brings out the fallacies with the assumptions in the Policy regarding data being seen as a ‘national resource’. “When the policy makes the statement that data should be looked at as a resource and the resources very similar to say spectrum or mining, I think there is one assumption that still needs to be challenged other resources that the government gives concessionary rights over a scarce resources, there is only one limited finite supply of that resource. I mean, it is not necessary that there is only a finite amount of data that you can generate, or the finite amount of insights you can generate, you can today if, for example, there is a transportation company that can generate.”

How should the Government go about collecting data, if at all?

“The question to ask therefore, is whether there are less coercive measures to actually get access to this data, and there is this one example that’s given frequently. There are two transportation companies, they know exactly how traffic works in the country. So if you had to set out measures for traffic planning, city planning, route planning, then you will need to go to these companies to get the data and why should we do this? That is a rhetorical question, answer being that this is actually data that is generated by the people of India transporting and traveling across India — why should the government have to go to a company and buy that information? Maybe it’s a valid claim, but I don’t think the assumptions that it makes that you will need that to curtail transfer and allow people to dip into that information. Coercive sharing of data cannot be your only your solution. I mean, that is not the only solution. I think this policy limits itself to only these solutions, I think there are many more solutions that may not be coercive that may have an impact that maybe could be allowed to be created by regulatory fear or by cooperation between entities.”

The other thing at least I believe in that is wrong with this policy is that any regulation that talks about separating, through transfers of data, I mean separating rights, ownership and allowing people to have call rights on the data and actually take it away from entities, without a robust framework for actually securing the privacy of an individual is a non starter.

Common Pools and Free Riders

Lalit Panda of Vidhi Centre for Legal Policy highlights the problem with the approach of the Policy from a theoretical framework, what he describes as the common pool-free rider problem: “This is the kind of paradigm that the e commerce policy is taken up to say, that we haven’t national interest in data. The common pool problem can be explained with the example of a pond. It doesn’t belong to anyone, it is a public good, and it is likely that it is going to be treated badly, because people are not going to feel a personal or private interest in protecting it. The free riders or who these individuals who exist in the public who feel that it’s not mine, I will dump on it, it’s the road it’s the public streets. Now with the Policy, one company is going to aggregate data, others are going to benefit from it, because it is going to get skived off as part of a government policy. All these other MSMEs SMEs are going to become free riders of the data that a bigger company has collected. This is a mistake in the characterisation of the problem. Don’t start with the privatisation with a private aggregation of data to start with, if you believe that there is public interest in certain kinds of datasets, identify those data sets and make it the government’s duty to police and collect those data sets.”

Why does the government want to collect, localise and redistribute data?

Prasanto K Roy, weighs in with some context of regulatory objectives behind the nexus of data sharing and data localisation: “If you see, as far as payments is concerned, you have an enormous amount of stuff which happens on a global payment platform. The holy grail they believe in is that all that should be ultimately replicated here… So therefore, data is the resource which can be processed this IoT data we were talking about the belief is that you know, IoT data will become a very fundamental part of this tradable resource. So there’ll be a whole ecosystem around that is you know something and Nandan Nilekani has written about quite famously, several times.”

“Now the RBI has said that, no, you have to store data only in India, they even going beyond that now they’re saying that processing. So, technically processing will be allowed outside, but the data has to come inside. But that processing was earlier being allowed or discussed at 120 days, 60 days, 30 days. Now, they talking about instant deletion. If you force instant deletion, you’re basically saying we are not allowing processing outside. If that happens, then the entire infrastructure has to be replicated. And to your question on the cost, it is in tens to hundreds of millions of dollars for the large payment networks. And that too is without — you still disconnect yourself from the AI ML which will occur on a global platform and which would be learned and acquired internally.”

Data as a Resource versus Data as Capital

Adnan Ansari, of 9dot9 Insights: “The whole policy look sort of looks as data as a resource, but maybe there’s a need to look at data as a capital and then apply the same principles, how capital flows between two countries? And what are the policies that you formulate in order to generate more capital. There is this thinking that’s out there, that data should be treated as a national resource. So we need to be very mindful that how to expand this discussion, so that correct inputs come into it. And then we need to look at not just data of the internet economy, but data from the offline economy as well — that discussion needs to be had, because we can be in our echo chambers and poke holes in this Policy, but if that thinking is already saved, saved at the regulatory level, we need to have a broader discussion, so that we don’t find a DPIIT policy talking about data in so much detail.”

“But the policy I think it sort of failed at the point where it’s not looking at the forward picture, of how do we grow this economy? I mean, if we go back, how does all of this connect to more jobs? What are the forward and backward linkages with manufacturing? Eventually are we going to only be an e-commerce service country? Or are we also talking about improving manufacturing some of those things?”