While India-China relations have seen their fair share of ups and downs, owing largely to their approximately 4000 km long shared border, the past few weeks have witnessed heightened tensions, including the border skirmish between the countries at Galwan Valley, Ladakh, on June 15, 2020. The engagement at Galwan Valley is perhaps the most violent encounter between the Indian and Chinese armies in decades. This has occurred, even while China faces severe international criticism on its handling of the spread of COVID-19.
In this geopolitical context, the Ministry of Electronics and Information Technology (the "MEITY"), on June 29, 2020, released a press note which blocked 59 applications, citing reasons such as sovereignty and integrity of India, defence of India, security of state and public order (the "Press Release").1 While the Press Release does not spell it out, all 59 applications are owned or controlled by Chinese entities. The Press Release follows Press Note No. 3 of 2020 dated April 17, 2020,2 issued by the Ministry of Commerce & Industry (the "Press Note"), to amend the FDI Policy, pursuant to which investments by companies or persons of "a country sharing land borders with India" were restricted and made subject to prior approval from the Indian government (the "Government"). The amendment is aimed at curbing opportunistic takeovers/ acquisitions during the COVID-19 pandemic, and presumably was issued with investments from China in mind.
Most recently, the Ministry of Finance, through an office memorandum dated July 23, 2020, issued an amendment to the General Financial Rules, 2017 (the "GFR"),3 on the grounds of defence and national security of India, requiring that bidders from "countries which share a land border with India" will have to register with the competent authority under the GFR, to be eligible to bid for any procurement of goods, services or works in India (the "GFR Amendment")4. While this is applicable to procurement by ministries and Government departments as well as other public enterprises, the registration requirement does not apply to countries to which the Government has extended lines of credit or in which it is engaged in developing projects. Given the said exclusion, the GFR Amendment also appears to be aimed at China, since bidders from Nepal, Bhutan, Myanmar and Bangladesh are exempt and, as such, the GFR Amendment currently operates only against India's adversarial neighbours – China and Pakistan.5
In light of the aforesaid developments, this article aims to analyse the Press Release, India's international treaty obligations, and the need for a well-defined policy to specifically modulate India's economic and trade relations with China.
2. PRESS RELEASE BANNING 59 APPS
As per the Press Release, the MEITY has blocked access to 59 applications by the powers granted to it under Section 69A of the Information Technology Act, 2000 (the "IT Act") read with the Information Technology (Procedure and Safeguards for Blocking for Access of Information by Public) Rules, 20096 (the "Blocking Rules") in view of threats of "emergent nature".
The Press Release states that the blocking order is in view of these applications being engaged in activities prejudicial to the sovereignty and integrity of India, defence of India, security of state and public order, and further, that the MEITY received several complaints of some applications stealing data and transferring the same in an unauthorized manner to servers outside India.
(a) Section 69A of the IT Act empowers the Government to issue an order for blocking access to information. The Blocking Rules provide for procedural safeguards against a blocking order under section 69A of the IT Act, including an opportunity to be heard. Further, Rule 9 (blocking of information in cases of emergency) of the Blocking Rules empowers a designated officer to examine the necessity of blocking information in case of emergencies. In such circumstances of an emergency, an interim order may be issued to identified persons/intermediaries to block public access to information without providing a prior hearing. Within 48 hours of being issued, the interim order is required to be presented to the committee formed under the Blocking Rules for passing of a final order.
(b) The Press Release ordering the ban of these 59 apps is not only absent of specific reasoning, but also includes vague and generic statements calling for the blocking of applications that harm India's sovereignty and affect its citizens' privacy; and fails to identify specific issues or grounds in respect of the applications listed therein. Further, the Press Release also clubs all the 59 applications together, disregarding the fact that each of these applications, ranging from social media platforms to an image scanner, have different functionalities and may be collecting and storing data in different ways. Considering the above, the fact that no prior notice was provided to the owners of these applications and no hearing was undertaken as required under the Blocking Rules, it appears that the Press Release is in the nature of an interim order at present, and the final reasoned order is awaited from the MEITY.
(c) At this juncture, it is also relevant to note that in Shreya Singhal v. Union of India,7 the Supreme Court of India, while upholding the constitutional validity of Section 69A of the IT Act, also noted that reasons have to be recorded in writing in a blocking order so that they may be assailed in a writ petition.
(d) In the absence of any detailed reasons for blocking each of the 59 applications in the Press Release, the legal tenability of such an order certainly seems questionable, and it does appear that the Press Release is primarily driven by the present geopolitical circumstances between India and China. Keeping aside the argument of whether this action of the Government is justified in the wake of such circumstances, and strictly keeping the prevailing legal framework in view, the Press Release sets a dangerous precedent by creating an easy route for blocking access to websites and applications without appropriate reasoning and grounds.
2.2 Waterfall effects of the Press Release
(a) Notices by MEITY and DoT
The Press Release has been given effect via notices by the MEITY to Google and Apple to remove the applications from their respective application stores. The Department of Telecommunications (the "DoT") also ordered telecom operators and Internet Service Providers (ISPs) to stop traffic of data on these applications and to block IP addresses and access to these applications.
(b) Platforms with user data and e-wallets
- As a result of blocking access to these applications, existing users are unable to access content already uploaded by them. It is unclear whether Indian user accounts will continue to exist on these applications and if users will be able to remove content already uploaded by them.
- Applications that collect personal information and/or sensitive personal data will be required to destroy such information8, since the collection and processing of such data no longer serves a lawful purpose.
- In case of platforms that allowed users to maintain or sync with e-wallets, or those that offered and credited monetary rewards or remuneration to users, it is also unclear as to what happens to the existing amounts in such e-wallets of users.
(c) Offline apps
Applications which run offline and are already downloaded will also continue to function on the user devices and, as such, the blocking order will not be practically effective against such applications. However, these applications will no longer receive any developer support or further updates.
(d) E-commerce platforms
Since only access to the applications is blocked through the Press Release, it is unclear if e-commerce platforms such as Shein, Romwe and Clubfactory will be allowed to fulfil orders already received by them prior to the Press Release. These platforms may have to set up refund mechanisms for orders that were pending on the date of the Press Release. As per some media reports, Clubfactory has already delayed payments to sellers on its platform. This will further affect these sellers' ability to provide refunds to buyers on the platform.
7. Shreya Singhal v. Union of India, AIR 2015 SC 1523.
8. Rule 5, Information Technology (Reasonable security practices and procedures and sensitive personal data or information) Rules, 2011.
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