TThe year 2022 witnessed a renaissance of curiosity-led innovation in digital markets. In particular, ChatGPT, a “generative artificial intelligence” chatbot powered by Microsoft-backed research lab OpenAI, went viral. Many analysts participation ChatGPT has the potential to revolutionize the search engine marketwhich was previously thought to be almost impossible given Google’s two decadess of dominance.
It can be tempting to see such developments as aberrations.
As we enter 2023, the sudden rise of generative AI serves as a helpful reminder that technological innovation will always disrupt the status quo and outshine incumbents.
India’s policy makers should base themselves on the boundless potential of innovation and enable it through three major technology policy reforms already planned for 2023. These include the dsmooth Indian Telecommunications Accountthe dsmooth Digital Protection of Personal Data (DPDP) Accountand the coming Bill Digital India.
Future-proof data protection
First the new telecom Bill aims to bring telecom regulation into the digital age. However, the bills expansive mandate may create obstacles to innovation. It specifically opens up the grim prospect of licensingsregime for over-the-top (OTT) communicationn apps like WhatsApp and Signal. In doing so, the bill conflates different types of services (services that distribute spectrum and those that distribute Internet-based services) and potentially bring them under the same licensing scheme.
The difference between traditional telecom services and OTT services is that, unlike spectrum – a rival resource that can only be distributed by a limited number of players – the internet is not scarce. Therefore, there is little justification for licensing applications that run on it that could curb innovation by creating barriers to entry for new players. In fact, the Telecom Regulatory Authority of India (TRAI) echoed this view only in 2020.
Second, the DPDP bill is ostensibly a principles-based compliance framework for data fiduciaries (ie companies that collect and process data), which also aims to allow cross-border data flows. The Internet is boundless in its conceptualization, and access to global markets is imperative for innovation to flourish. Cross-border data flows thus play a crucial role in stimulating more innovation.
However, the government is exercising its discretion to whitelist trusted jurisdictions, allowing such flows only from certain jurisdictions. This whitelist is based on criteria that have not yet been published. In comparison, even imperfect data protection frameworks, such as the European Union’s general data protection Regulation establish clear principles enabling cross-border data flows. India should also specify some objective principles for whitelisting other jurisdictions so that companies can plan prospectively.
India also needs a future-proof data protection architecture that takes into account the evolutionary nature of internet apps. For example, the centrality of a “notice and consent” based framework for the processing of personal data, as set out in the DPDP, has become obsolete. This concept originated in the 1990s of the determination of “informed consent” in care.
It is insufficient for an immersive internet powered by cloud computing, AI, and augmented reality because it burdens users with obligations to understand how their data is being used. Even technologists find it hard to envision the end use of all the personal data that will be collected in future metaverses. India should instead prioritize concepts such as privacy-by-design that push companies to truly empower users rather than issuing notices for the data they collect at every turn.
Finally, India is all set to replace the Information Technology (IT) Act, a 22-year-old piece of legislation that is currently the the countries internet regulation, with the Bill Digital India. Everything indicates that the new regime will prioritize concepts such as “accountability” through stricter compliance for intermediary services such as social media and video-on-demand.
In addition, reports suggest that the Bill Digital India could pave the way for category-based rules for intermediary services. But if such rules are too prescriptive or narrow, they can inadvertently create category lock-ins. For example, game companies are reluctant to introduce product innovations such as social media into their games for fear of additional compliance. The point is that large incumbents in different categories of intermediary services may be well placed to respond, but new entrants will find it difficult to comply as their business models continuously evolve and occupy different categories.
India should instead drive innovation on the basis of a new kind of ‘safe haven’ for middlemen. Safe harbor in internet regulation guarantees legal immunity for companies that act as conduits for information and content in exchange for good design practices as the removal of illegal content. This regulatory concept originated in the US in the mid-1990s and is credited with giving rise to the modern Internet as we know it.
This concept requires new imagination in light of the previously unimaginable scale of online brokerage, like new complexities arising from the emergence of decentralized applications of ‘Web 3.0’. India should incentivize risk-based and activity-based triggers for intermediary liabilities in exchange for safe haven.
A legal-regulatory environment that prioritizes and fosters innovation could catalyze the participation of one billion users in India’s ‘techade’. The three forthcoming Accounts discussed here provide a once in a decade opportunity to make this happen. Policy makers would do well to recognize this opportunity and embrace the innovation potential of technologywhich continues to amaze even tech skeptics.
Lalantika Arvind and Vivan Sharan work at Koan Advisory Group, a technology policy consultancy. Opinions are personal.
This article is part of ThePrint-Koan Advisory series that analyzes emerging policies, laws and regulations in India’s technology sector. Read all articles here.
(Edited by Tarannum Khan)