“There’s this Hallmark card from 20 years ago that used to say, ‘Everything I love is illegal, immoral, or fattening.’ [The Non-Personal Data Governance Framework] is the closest I have seen any draft come to that,” Sameer Nigam, CEO of PhonePe said. “I’ve spoken to quite a few friends in the startup industry who really understand the dynamics of tech, and Big Tech particularly. How it will play out is riddled with a bunch of very weird manifestations in terms of who gets to ask for whose data, how it’s used, how it’s shared forward, who gets commoditised, and what gets democratised.”

Nigam, who was speaking at MediaNama’s discussion on the Governance of Non-Personal Data, made the remarks in a personal capacity since PhonePe has not finalised its views on the subject.

  • How non-personal is non-personal data? “The premise that you can anonymise somebody’s data by just removing a couple of identifiers, and yet be able to pull all that data and stitch it together through other means and not really zoom in very close to the atomic level, which is the individual level; I think technology has proven otherwise,” Nigam said. “If everyone, especially companies that really know how to massage data, have access to my GPS location from my food deliveries and have access to my non-personal banking data from my payment transactions and what-have-you, some of the parts make it very easy to identify the actions of an individual. I may be nameless and faceless, but I am somebody that you can target.”
  • Collective privacy may have to be litigated: “This is the debate that we’re going to end up having in the courts: when I transact with someone, I’m giving them consent, and that too limited consent,” Nigam said, remarking that jurisdictions around the world including India are moving towards a narrow scope for consent. “In that, it is implied that not just what I do at an individual level, but perhaps even the actions of collectives are something that cannot just be bought for a dollar. I don’t think that debate has happened in the public domain, that people have started thinking about, okay, do we want everyone to know how much sales of a particular type of product or service is happening in a road or neighbourhood?”
  • Who decides data prices? “Even if consumers at large, the citizens of the country, were fine with their data being shared, the minute you introduce pricing, you run into a few problems in my mind. In the current proposal, there’s an agency that decides the rights by which an organisation, government or private, can request another private entity for data. Who decides the right value of that price?” Nigam said.
    • Conflict of interest: “The immoral part in my mind, and this mirrors the BCCI case we had, with auctions for IP happening with somebody heading both the auction house as well as running the games; if the government is proposing to be able to buy non-personal data for public benefit, but there’s an entity that is directly or indirectly influenced strongly by a state player on the pricing of that data, there is a very genuine risk that there will be inconsistencies in how one entity’s data versus another’s is priced at any given point of time, because the house is playing the game. I think that will be challenged. I’d be very surprised if it doesn’t get challenged and doesn’t pose problems. The ethics are questionable.”
    • Value of data differs by entity: “Even if you take out any moral or ethical concerns, and you say, hey, society will really flourish if everyone could access everyone else’s sales data, trends data, whatever else they have aggregated, to “break” purported monopolies,” Nigam said, “we are not understanding the nature of either starting up or how tech companies work today, nor are we acknowledging the fact that the value of a dataset is completely different from one entity to the other.”

Example: Let’s say Ola’s operating in a couple hundred cities, and Uber is their competitor. Let’s say Meru wants to get into online ridesharing. One is a direct competitor, one is an offline competitor. Let’s say the government also says they want to start a service for taxicabs. There are now three different stakeholders. What is the price that you would ascribe to Ola’s category-wise sales data by city or by PIN code? If you were sitting at Uber or Meru right now, or if you’re a government agency, my gut says that each should have a very different clearing price. And that is market forces. The minute there’s one agency saying that I’ll determine the fair price, or set the price at which one of these three can buy, it’s either set too low or too high.

    • Capital warps the playing field: “If there is somebody sitting on the outside trying to have a point of view which is legally binding on how much my data is worth, or how much somebody else’s data is worth to me, I think we’re trying to basically take — in every vertical, sector and industry — we’re trying to get into the heads of every entrepreneur out there, which is just not possible, practically speaking. You will have huge errors of judgement. If you have huge errors of judgement, but the law says you can ask anyone, it is always stacked in favour of those who have the capital.”
    • Corruption is likely: “I don’t think historically anyone in any country has purported that a government or a quasi-government entity, given full subjectivity without any prescriptive rules on how much to price data at, will not lead to a lot of graft,” Nigam said. “Graft will follow.”
  • The odds are actually in favour of incumbents: “Now take an early-stage startup — they say this will help start-ups get data that only big companies have. I would contend that the odds are stacked completely in the opposite way,” Nigam argued. “If the data is priced at a near-commoditised level, where small startups — Series A startups or startups with two starry-eyed kids in a garage — let’s say they want to know exactly what the top 500 search items on Google are to start their own search engine. Well, if you can afford to ask for that data, then when Google decides that they want to ask the really small guy for very precise data, the price can’t be much higher — it’s principles of the same data, principles of fairness. If that is true, if it is affordable for the small player to ask the big player for data, then the big guy will always be able to outspend. They will sharpshoot and get the best data from everybody. The Spotifies will get the playlist data from Saavn, Gaana, and from new upstarts. The small guys don’t have the coffers to get the data from everybody. If you price it high enough, you will want to make sure you’re not victimising either the startup or a big company. The more you charge, the less people can get access to data.”
  • Data as IP: Nigam argued that for small startups, a lot of the work revolves around creating and monetising the data they collect with users’ consent, which requires investment and brand-building. “Let’s be honest, we’re sitting in India. In less than two or three weeks, you’ve got twenty TikTok copycats. Everybody can do food delivery, everyone is doing e-com delivery. There are fifty people. What makes one company different from another? The usage of data to improve their supply chain, to get better predictability and recommendations. If data is not IP, then what are investors putting money behind?”
  • Only Big Tech can survive: “The top five competitors that PhonePe plays within the payments market in India, their combined market cap is $6 trillion,” Nigam pointed out. “Every time we walk into the office, we know we are literally cockroaches in this space. Having said that, for more startups in India, a company with 200 million users [like PhonePe] is a behemoth. Who is being helped here, who are we fighting here? I think there’s a lot of these questions that are just not getting answered in the [Non-Personal Data framework]. But what I have seen gives me the absolute shivers because we will kill Indian startups. Big Tech will survive, they have the capital to get the data if it can be bought, and they have the distribution muscle. Even if products are commoditised they will win.”

“Google, Facebook, Amazon, they enter their win on the back of distribution. The distribution muscle is disproportionate, it’s not evil, I’ll not go into evil/not evil. If you have the money, Jio’s entering 25 categories at the same time with money. In the physical world, companies like Tata and Birla play in 50 industries, and we never said anything. The same company is selling oil and selling salt and tea and building automotives, and we never said, hey, you have too much muscle.

“Entrepreuneurial spirit and capitalism go hand in hand. If you want to unleash the entrepreneur, we have to do it the hard way. I haven’t lost my hair because it came easy, but because it was hard. But you know what, it’s also very rewarding when you do it the right way. Saying that I can just go raise a lot of money, I might have a lot of money already, and take a sector and say, let me find the three poor saps who are dominating, get their key data, short-circuit my business development cycle by two or three years, and just cherry-pick off the top of each of these guys, I think that’s what we need to watch out for.”

  • A romanticised idea: “This is a highly romanticised idea,” Nigam said. “Thus far what I have read, is a really a romanticised idea. I have not spoken to one entrepreneur in the last two or three months that this has been in circulation who said that they’re for it. So I’m very curious about why this has been positioned as a pro-early stage entrepreneur. I literally haven’t met anybody [in that category who supports it]. That is unless we’re talking about those who haven’t entered the market, people who would have entered a market but didn’t. If you could, you would have already.”