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SC issues formal notices to WhatsApp, Facebook in UPI data protection case

Supreme Court
Credit: Aditi Agrawal

The Supreme Court on Monday issued formal notices to Facebook, WhatsApp, Google, and Amazon in response to a petition seeking regulations on data collection by Unified Payments Interface (UPI) companies. The plea filed by Rajya Sabha Member of Parliament Binoy Viswam says that Indians’ right to privacy should be protected from being misused by “giant corporations” for their “financial ends”. It has also sought that WhatsApp Pay’s full-scale operations be halted until complies with the necessary legal provisions.

During the hearing, it was pointed out that WhatsApp, Facebook, and Amazon were yet to file their counter-arguments. The Supreme Court had initially sent notices to these companies in October 2020.

SC allows Impleadment Application

In January, the Supreme Court allowed an Impleadment Application, which placed “on record certain additional facts and documents related to the New Privacy Policy of [W]hats[A]pp”. The application said that the updates to WhatsApp privacy policy, which allowed for more data sharing with Facebook, violates norms set by the National Payments Corporation of India (NPCI) for UPI platforms which prohibits the sharing of individual UPI transaction data and UPI related customer details with any third-party including Facebook. However, WhatsApp has clarified that it does not share UPI data with Facebook.

The application was filed by one Yedhu Menon, who described himself as an independent Information Technology professional. It was filed through Supreme Court Advocate on Record Deepak Prakash. MediaNama has seen a copy of the application.

RBI says NPCI governs UPI

In December last year, the RBI filed its response to the petition and said that it was actually NPCI, and not RBI, which operates different payment systems including UPI. Since the RBI does not give authorisation or approval to Third Party App Providers — WhatsApp Pay, Google Pay, and Amazon Pay — they’re not considered as system providers under the Payment and Settlement Systems Act, and hence do not fall under the regulatory domain of the RBI directly, it said. MediaNama has seen a copy of RBI’s counter-affidavit.

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It also said that WhatsApp Pay’s beta mode, and Google Pay were already functioning in the country before the central bank released its data localisation norms. The RBI added:

“While it is of utmost importance that the requirement of storage of payment data only in India is met with expeditiously, it has to be ensured that any regulatory measures do not disrupt the ongoing payment transactions under the existing payment and settlement systems of the country or adversely affect the interests of the general public.” — RBI’s counter affidavit in response to Viswam’s petition

The next hearing is scheduled after four weeks from the time of publishing.

Also read: 

*Update at 5:15 PM, Feb 2: Updated with details of advocate via whom the IA was filed. Originally published at 04:22 PM, Feb 2.

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