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Draft privacy law recommends curbs on tracking children, affecting business model of tech companies

Tech companies like Facebook and Google might have to change their business model if privacy law comes into effect.

  • Published: July 30, 2018 10:43 AM IST
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Google, YouTube, Facebook, Instagram and Snapchat will face a big hit in their business model if Justice Srikrishna Committee’s data privacy recommendations are implemented by the government. The draft report submitted to the IT minister recommends to curb data tracking and advertising targeted at users under the age of 18.

The draft data privacy law submitted by the panel recommends severe restrictions on companies that operate websites or services aimed at children. It also calls for restrictions on services that process large volumes of personal data of children. The draft policy suggests barring companies from profiling and tracking of children, carrying out their behavioral monitoring or targeting ads at them. It also recommends restricting these services from processing personal data that can significant harm to children and teens under the age of 18.

The announcement will have its biggest affect on Silicon Valley-based tech companies but it will also affect education tech companies like Byju’s that offers online coaching services to children and uses gamification for a streamlined user experience. It will also restrict gaming firms that collect user data. “The justification for such differential treatment arises from the recognition that children are unable to fully understand the consequences of their actions,” the Sri Krishna Committee said in its report.

The panel notes that while some of the websites and apps allow children to sign up if they are 13 years of age or older, their consent to the terms and conditions are not applicable under India’s laws. The report notes that a minor cannot enter into a contract under the Indian Contract Act 1872. The undertaking only means that these minors have not consented to the terms laid down by these tech companies and applications. In its report, the panel notes that data collection and processing remains opaque and lost in a number of consent forms in the digital world.

The panel’s report has been submitted to Ravi Shankar Prasad, the IT and law minister and his ministry will submit final privacy law to PM Narendra Modi. If the final draft gets approved and amended into law then these tech firms will have no option but to change their business models. The logical solution would be to switch to a subscription or freemium model, reports the Economic Times.

While social media platforms require their users to be 13 years of age or older, they don’t have a mechanism in place to verify real age. The draft law proposes change to that strategy and recommends these companies to set up age verification mechanisms and get parental consent of users under the age of 18 to process data. While the suggestions are commendable and should be recognized as a step in right direction, it will lead to higher cost for these tech companies, who may or may not be willing to bear that additional cost of verification.

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The social media companies operate on the basis of Children’s Online Privacy Protection Act in the US, which is applicable for those under the age of 13. The General Data Protection Regulation (GDPR) that came into effect in Europe in May recommends age limit of 16 for parental consent. In the recent times, children’s have been found vulnerable to online social media scams and life threatening games like Blue Whale Challenge and these new rules will bring some order to social media platforms and could even protect children from being misguided or misrepresented for data collection.

For tech companies, the bigger scare would be losing a large share of user base. Children constitute a large number of Internet users and more than 40 percent of India’s population of below the age of 18. While these tech companies have not commented of the draft privacy law, they might be preparing for immediate action if government accepts the draft policy.

  • Published Date: July 30, 2018 10:43 AM IST