In a letter to MeitY joint secretary Gopalakrishanan S., citizen engagement platform LocalCircles said the government “should not have access to either the aggregate data nor the algorithms used by a business as such an access can be easily misused or compromised”. It said such aggregated data is the core of their business model. On the basis of a survey of 6,000 start-ups conducted by LocalCircles, the company said government access to aggregated data should be permitted for law & order investigations or in enforcement situations.

LocalCircles founder and CEO Sachin Taparia also said that there is “confusion” about which ministry is responsible for coming up with an aggregate or anonymised data policy, which will potentially be distinct from the E-commerce Policy.

LocalCircles conducted this survey to understand start-ups’ view on the e-commerce policy and data. According to the survey, 53% of 3,582 startups surveyed are of the view that the Indian authorities should direct private e-commerce businesses to share data only during “law and order and investigation” situations. About 14% were also of the view that the authorities should never seek for aggregated data.

Pie chart showing survey results to the question 'The draft e-commerce policy mandates that Indian authorities can ask a private business to share any aggregated data, any time. Is this apropriate?'

Source: LocalCircles

Start-ups should be permitted to share aggregated data with companies abroad

In its letter, LocalCircles has made suggestions on the draft e-commerce policy:

  • Aggregated data is core of business model: “Businesses spend significant amounts of resources to collect data, build products and services and a market and for many businesses aggregate data is the core of it and they must protect it to protect their value proposition and the business itself,” the letter noted. This is in response to the mandate under Draft National E-commerce Policy which states that “request from Indian authorities” to share aggregated data should be complied with immediately.
  • Start-up with offices outside India may need to share user data with foreign companies: The draft e-commerce policy aims to “regulate cross-border data flow” and thus imposes restrictions on sharing data of Indian users with “other business entities outside India”. According to the letter, startups may need access to overseas resources as many technologies are being developed abroad. Companies looking to hire resources abroad or set up offices outside India may need to share aggregated data.
    • “It is imperative that the aggregate data of Indian startups be permitted to be shared with at least group companies they have overseas. Similarly, if a foreign company acquires an Indian startup, they may have plans to take the product/service developed by the startup and scale it further globally and hence would require access to aggregate data of the startup,” the letter said.
  • Start-ups should benefit from government and corporation data: The letter noted that a start-up social responsibility program should be considered where large corporations should share aggregate data sets from the industry so that startups can benefit from these insights and develop more targeted products.