India’s Cyber Policy is still in its nascent stage. The Personal Data Protection Bill, 2019 was tabled in the Lok Sabha during December 2019. It has two principal functions, to provide protection of personal data and to establish an enforcement mechanism in the form of a Data Protection Authority. The present vanguard of the technology is with limited number of foreign players, leading to arguments critical of ‘Data Imperialism’ and ‘Data Colonialism’ versus ‘Data Sovereignty’. During 2018, Private companies invested into the opening of payment and settlement mechanism liberalisation with the Reserve Bank of India placing unfettered regulatory access over data with all the entities in the payment ecosystem. The regulatory mechanism was in the form of System Audit Report by CERT-IN empanelled auditors. This brought in the mandate of payment data localisation over these entities.  Sparring ensued over Net-Neutrality and Data Colonialism bringing in a sticky wicket in all Trade Talks between India and USA at the pressure of the Data Kings at Silicon Valley notwithstanding Europe’s tryst with General Data Protection Regulation. The debate as well as the criticism is driven by the onerous task the enforcement agencies had to deal with data access stored abroad on one side and the economic interests on the other.  Reliance Industries has been a strong votary of Data localisation with almost all the other foreign players like Facebook, Google and Microsoft opposing. Interestingly, payment service like Mastercard, entrants into payment field Facebook owned WhatsApp and Google Pay looking at the United Payments Interface exhibited willingness to oblige the 2018 Reserve Bank of India directive for data localisation. However, RBI informed the Supreme Court that Facebook owned WhatsApp does not comply with Data localisation directive and hence were not permitted to engage in payment services.  This had a direct impact with US threatening H1-B Visa restrictions. Indian Government seems to have been led by its Data Sovereignty ideals rather than mere economical consideration[i]. The intangibility of Data poses huge legal implications in the form of ‘ownership’ as understood within the legal framework. 

Reliance Industries Limited boasts a gross debt of Rs.3 lakh crore and a net debt of Rs.1.5 lakh crore. RIL during April, 2020 announced stake sale of its Jio arm of 10 % to Facebook for nearly Rs.50000 crores. Evidently, the Facebook stake sale is a debt reduction exercise. Yet raising of any money by this Company from the market is titled by media as ‘raising equity’.  Similarly, RIL has also announced a Rights Issue to fetch Rs.50000 Crores which again will attend to only reducing its debt 6 times that size.  Facebook already faces a closed door in its Chinese sojourn.  Hence it has only India to expand its market presence.

Reliance Jio with 388 million subscribers base would look at leveraging the e-commerce space with the Retail arm Jio-mart. The span would now be Reliance Jio Mobile Platform + Facebook Whatsapp = Reliance Jio-mart and hence the market size converts to Reliance Jio 388 million subscriber base + Facebook 400 million customer base to be commercially exploited.  It was only in February, 2020 WhatsApp payment services facility was permitted by the Reserve Bank of India and WhatsApp pay will be rolled out.  This will be strategically important for Reliance to exploit the Jio-mart business with the last mile store connectivity platform. This can be looked at with the mandate of both NCPI and Data Localisation. Reliance right since 2016 harped on Data Localisation with its commercial values rather than any national interest on the principles of Data Sovereignty. Facebook owned WhatsApp seems to have agreed for Data Localisation only with the Reliance stake roadmap. The big hit will be at Amazon and Walmart (Flipkart) investments. Our personal data is the greatest challenge here.  The Government has to only see to exploit this convergence for national gains with ‘Data as a National Asset’ argument. The counter argument could only be the ‘Surveillance State’. Clearly the market pushing the Governance scenario emerges. The Cambridge Analytica scandal model application with the above scenario will be the inevitable noise which both Reliance and Facebook will face in the shortest upcoming time. The citizens private data protection is the ultimate goal for the legislation. The Personal Data Protection Bill requires course correction to particularly deal with Reliance – Facebook type of convergence to pull the rug under our legs, notwithstanding the primacy on Data Localisation. The present Reliance Facebook marriage is to sweep them all in one go, the debt, the technology, the marketplace and the consumer. As it emerges, since 2018 every visit by every American Bureaucracy has to be looked at only with this prism.  The forthcoming visitors will only be the Saudis with their Aramco investments hitting the shores with the Reliance Petro arm which Reliance will have no reason to refuse. Earlier in 2016, India banned the ingenuous Free-basics[ii] model which Facebook vehemently pressed to be brought when the critics argued of an unfair marketplace and being against Competition Law principles. Facebook is evidently piggybacking on Reliance Jio and will attempt again. This may again be viewed from the convergence angle of Reliance Jio-mart + Facebook Free Basic + WhatsApp causing virtually market dominance and extreme unfair product shelf.  It’s not any more the Customers Choice who is already facing the targeted advertisement mechanism that Facebook and Google had placed them with. This convergence poses a huge threat to Net Neutrality and hence Democracy. The proof lies in the dying down of almost all the leading contenders in the mobile telephone service providers after Reliance Jio came into market. The tall man standing contender is only Airtel.  Facebook and WhatsApp already poses a threat in the form of end-to-end encryption argument when the Government of India will have to demand for decryption keys and access to user data to trace origins of messages when demanded by the Law Enforcement agencies, notwithstanding the presence of data within the Country.  We are to be reminded Facebook admitted to mis-use of its platform by Cambridge Analytica and such other attempts by various players during the American Elections.  It’s not the market place which will face a threat but the entire gamut of OTT services on the Internet stream.  TRAI rightly brought in the ‘Prohibition of Discriminatory Tariffs for Data Services Regulations’ guided by the principles of Net Neutrality.

We in India have a legal system with the Onus Probandi on the dominant party to act fairly particularly in a fiduciary relationship, where the proof of good faith in transactions in relation of active confidence is on the one who stands to the other in a position of active confidence. The phrase ‘active confidence’ indicates that the relationship between the parties must be such that one is bound to protect the interests of the other. The strength of the Competition Act is built on these legal principles that it prohibits anti-competitive agreements as well as abuse of dominant position. The key questions will be the politics of the Reliance-Facebook business that has to be predominantly dealt with by the Personal Data Protection Bill, 2019 during its Parliamentary deliberations rather than merely looking at the exploitation of the Technology and Commerce.

[i] https://www.epw.in/node/155932/pdf

[ii] Users access to certain apps and websites are free of charge for mobile data.

Post fact :

WHAT WE SEE AND WHAT WE DON’T GET

Reliance – Equity – Debt

South of the South-pole

It was pointed out earlier Reliance Industries was sitting on a gross debt of Rs.3  Lakh Crore and when Facebook placed their money, Reliance announced the Rights issue to fetch Rs.50000 crores. Lockdown notwithstanding Reliance Stocks soared high and investors queued up with their money into Reliance.

All speakers sounded equity investments queue on Reliance doors when in fact it was pointed out all this money was to cover only debt. The contention was Reliance Facebook marriage was to sweep the debt, the technology, the marketplace and the consumer.

RIL now has declared to have become NET debt free. For you and I this means whatever has been borrowed by RIL has been repaid or in line for repayment.

The Rotation & Revolution of Earth makes the Poles an imaginary idea.

Now it makes no sense if this’s Debt or Equity Investments for all those loud speakers which made the individual in you to invest. The intellectual argument is the loud speakers are not the ones to be stoned. You don’t kill the bird.  

But the question is does the Intellectual also have Intellectual Honesty to decipher and spread out the magnetic NORTH and SOUTH so much so EQUITY and DEBT.

You don’t need understanding of fourth dimension of space to understand this.  Kill the bird now.