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WhatsApp to SC: will launch payments only after compliance with RBI norms; trial to end by July

WhatsApp today assured the Supreme Court that its payments service in India is currently in trial mode and will launch fully only after compliance with the RBI’s norms, per Bar & Bench. WhatsApp said it’s likely to complete the trial run by July. “We cannot launch the product without compliance,” said WhatsApp’s attorney Kapil Sibal. The apex court was hearing a petition seeking direction that WhatsApp comply with RBI norms for its payments service. The court has now listed the matter for July, taking note of WhatsApp’s assurance.

Update: This matter is now listed for July 17th, 2019 (see order copy at the bottom).

This development comes just a day after Facebook CEO Mark Zuckerberg reiterated that the company won’t store user data in countries which have a weak law and where governments may get access to it:

“More countries following the approach of authoritarian regimes adopting strict data localisation policies where governments can more easily access people’s data, and I’m highly concerned about that future.”

“Our stance on data localisation is a risk. That is, if we get blocked in a major country, that will hurt our community and our business. But our principles on data localisation aren’t new and this has always been a risk.

Mark Zuckerberg

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Petition sought direction for WhatsApp to comply with Indian laws

Delhi-based organisation, the Centre for Accountability and Systemic Change, had petitioned the Supreme Court about WhatsApp’s failure to comply with Indian laws, including its failure to appoint a grievance officer. It stated that WhatsApp is a foreign company with over 200 million users, but without any servers or offices in India. It further says that having an office and a grievance officer for users is necessary under Indian law.

Further reasons that the petition seeks compliance for:

  1. Cooperation with law enforcement: The petitioner states that WhatsApp is not co-operating with Indian intelligence agencies in their probe on terrorist activities. At the same time, government service and law enforcement in India is using WhatsApp to render their services, but they do not have a person of contact at WhatsApp should they face any problems. “The biggest messaging platform has no WhatsApp number of its own, which in turn is dangerous for the Rule of Law in India.”
  2. Grievance redressal requirements: WhatsApp is not complying with the IT Act 2000, which mandates that all intermediaries appoint a grievance officer. The government allowing WhatsApp to do so is discriminatory as it puts restrictions on others but gives WhatsApp a “free hand”. Further, WhatsApp current grievance officer is based out of the US, making the position ineffective.
  3. Taxes: WhatsApp does not pay any taxes in India, which violates the freedom to do business under Article 19.
  4. RBI’s localisation mandate: “WhatsApp must be directed to store the data in Indian servers as mandated by Reserve Bank of India, and pay taxes on income caused due to its operations in India,” the petition states.
  5. WhatsApp as an OTT service, and its regulation: WhatsApp being an OTT service which enables users to make calls, send messages and media, just like TSPs, does not follow any grievance redressal and data localisation norms that govern TSPs.
  6. Violating poll conduct: Political parties use WhatsApp groups to message voters during the 48-hour silent period.

[embeddoc url=”https://www.medianama.com/wp-content/uploads/WhatsApp-SC-case-order-May-3rd.pdf” download=”all”]

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