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Daily Current affairs 27 DECEMBER 2018

UPSC - Daily Current Affair

Interception of phone, computer data: the law, procedures and safeguards

Context

• Recently the Ministry of Home Affairs issued a notification authorising 10 central agencies under the Information Technology Act, 2000, to intercept, monitor and decrypt any information generated, transmitted, received or stored in any computer resource.

• The notification was issued in accordance with Section 69 (1) of the Information Technology Act, 2000 and rule 4 of Information Technology (Procedure and Safeguards for Interception, Monitoring and Decryption of Information) Rules, 2009.

 

Legal Provisions

Social media content

• Section 69 (1) of IT Act 2000, allows the government authorities to decrypt information if it is in “the interest of

✓ sovereignty or integrity of India,

✓ security of the State,

✓ friendly relations with foreign States

✓ public order or

✓ for preventing the commission of any cognisableoffence.

• Further Rule 4 of the Information Technology (Procedure and Safeguards for Interception, Monitoring and Decryption of Information) Rules, 2009, empowers a competent authority to authorise a government agency to “intercept, monitor or decrypt information generated, transmitted, received or stored in any computer resource.

• These provisions are essentially related to monitoring of emails and social media content

 

Phone tapping

• As per Section 5(2) of the Indian Telegraph Act, 1885, lawful interception of phones and computerscan be done by the governments at the Centre and in the states.

• In its ruling in the 1996 PUCL vs Union of India, the Supreme Court laid down certain safeguards for lawful interception under Indian Telegraph Act, 1885.

• Accordingly Section 5(2) does not confer unguided and unbridled power on investigating agencies to invade a person’s privacy.

• Further the orders clearing lawful interception can be issued by Union a Home Secretary and are reviewed by a review committee under Rule 419-A of the Indian Telegraph Rules, 1951.

 

Recent order

• The competent authority, Union Home Secretaryauthorized 10 central agencies to intercept, monitor or decrypt information.

• The 10 central agencies authorized included

✓ Intelligence Bureau

✓ Narcotics Control Bureau

✓ Enforcement Directorate

✓ Central Board of Direct Taxes

✓ Directorate of Revenue Intelligence

✓ Central Bureau of Investigation

✓ National Investigation Agency

✓ Cabinet Secretariat (RAW),

✓ Directorate of Signal Intelligence (for service areas of Jammu & Kashmir, North-east and Assam only)

✓ Commissioner of Police, Delhi.

• Each case of interception will be assessed by Union Home Secretary as per the provisions of the IT Act.

• Further Rule 22 of the IT (Procedure and Safeguards for Interception, Monitoring and Decryption of Information) Rules 2009, provides for review committee headed by cabinet secretary to review the cases of such interception.

• The review committee shall meet at least once in two months to review such cases.

 

Why was the order passed?

• The existing provisions in the IT and Telegraph Act did not have explicit provisions to deal with ''stored data'' in devices such as computer, thumb drive, CD or handset memory.

• The notification clarifies which agencies can approach the Centre and state governments for permission to exercise the powers of interception.

• Thus it prevents unauthorised use of these powers by other agencies, individual or intermediary.

• It will also ensure that lawful interception or monitoring of computer resource is followed as per due process of law.

 

Criticism

• The notification issued authorizing 10 central agencies to intercept, decrypt data is challenged in the Supreme Court on the grounds that it violated Right to Privacy guaranteed under Part 3 of the Constitution.

 

Section : Defence & Security

 

The IT rules for online platforms: what govt proposes to change?

The News

  • The Union government is mulling changes in the Information TechnologyIntermediary Rules that makes it mandatory for the ‘intermediaries’ like online platforms to deploy technologies to curb unlawful content as well as totrace their origin.

 

Background: Need for amendment 

• Recently India has witnessed rising incidents of violence due to misuse of social media platform.

• Circulation of fake news, child porn and other objectionable content is on the rise in India.

• Social media is increasingly misused for activities including recruitment of terrorists, circulation of obscene content, spread of disharmony, incitement of violence, public order, fake news etc.

• As a result, in the Monsoon session of Parliament the government had spoke of introducing changes in Section 79 of the IT Act.

• The government has been of the view that the onlineplatforms will be treated as abettor of rumourpropagation.

• For instance recently in August 2018 the government had issued two notices to Whatsapp to curb objectionable content and rumours being spread on the messaging platform.

 

Proposed Amendment to IT Act

• The proposed The Information Technology (Intermediaries ​Guidelines ​Amendment ​Rules) 2018 seeks to amend provisions under Section 79 of the Information technology Act.

• Accordingly to the Draft Rule 3(9), the online platforms or “intermediaries” must “deploy appropriate mechanisms to proactively identify, remove or disable access to unlawful content.

• Simply put this makes online platforms to become proactive arbiters of “unlawful” content.

• Further the online platforms would have to inform its users to refrain from hosting, uploading or sharing any content that is blasphemous, obscene, defamatory, "hateful or racially, ethnically objectionable" or those which threaten national security.

• According to the Draft Rule 3(5), the intermediary shall enable tracing out of originator/source of unlawful content on its platform. 

• The intermediaries shall within 72 hours provide​ ​such information or assistance as asked for by any government agency who are legally authorised.

• In effect platforms like WhatsApp may have to break end-to-end encryption and save information on all data.

• Further the intermediary shall preserve such information and associated records for at least 180 days for investigation purposes.

• The intermediaries with over 50 lakh users in India shall have a permanent registered office and appoint a nodal person to coordinate with law enforcement agencies to ensure compliance.

 

What is unlawful content?

• The unlawful ​content to be curbed is relatable to Article 19(2) of the Constitution of India in the interest of

• sovereignty and integrity ​of India,

• security of the State,

• friendly relations with foreign States,

• public order, decency or morality,

• contempt ​of court,

• defamation or incitement to an offence,

 

Criticism

• The proposed amendments may have serious implications for freedom of speech online.

• The amendments are very similar to Section 66A of the IT Act that was struck down by the Supreme Court in 2015 in Shreya Singhal case as being violative of Article 19(1)(a) and  not  saved  under  Article 19(2).

• It should be noted that Section 66A made it a punishable offence for any person to post any information that is offensive or has menacing character.

• It had created a ‘liability regime for intermediaries’, meaning that Draft rule 3 (9) shifts the onus of the state to a private party.

• Draft Rule 3(5) on traceability could break end-end end-to-end encryption offered by some of the platforms like Whatsapp.

• The proposed amendment will introduce ‘traceability requirement” to break end-to-end encryption that is continually being denied by platforms like Whatsapp.

• Pro-active censorship or traceability may stand against the right to privacy guaranteed under Part 3 of the constitution.

 

Section : Defence & Security

 

Panel suggests consultation with states for fixing minimum wages

The news

• The Standing Committee on Labour has finalised its recommendations on the first among the four labour codes proposed by the government, ‘The Code on Wages Bill, 2017’.

 

About the four labour codes proposed by the government

• As part of labour law reforms, the Government has undertaken the exercise of rationalisation of the 38 LabourActs by framing 4 labour codes-

o Code on Wages.

o Code on Industrial Relations.

o Code on Social Security.

o Code on occupational safety, health and working conditions.

• Related laws will be merged to create above given labourcodes for particular aspects of industries.

• Code on wages: The Minimum Wages Act, the Payment of Wages Act, the Payment of Bonus Act, the Equal Remuneration Act and a few others are being merged to create a “single legislation called Wage Code Act”.

• Code on Industrial Relations: the Labour Code on Industrial Relations, will combine Industrial Disputes Act, 1947, the Trade Unions Act, 1926, and the Industrial Employment (Standing Orders) Act, 1946.

• Code on social security: Nearly a dozen laws related to social security, including the Employees’ Provident Fund and Miscellaneous Provisions Act, Employees’ State Insurance Corporation Act, Maternity Benefits Act, Building and Other Construction Workers Act and the Employees’ Compensation Act will be merged to create a single social security law or code.

• Code on occupational safety, health and working conditions: Several industrial safety and welfare laws such as the Factories Act, the Mines Act and the Dock Workers (Safety, Health and Welfare) Act, will be merged to create a single code on industrial safety and welfare.

 

About the ‘The Code on Wages Bill, 2017’/Background

• The Code on Wages Bill 2017 was introduced in Lok Sabhaon 10.08.2017.

• It subsumes 4 existing Laws-

o The Minimum Wages Act, 1948.

o The Payment of Wages Act, 1936.

o The Payment of Bonus Act, 1965.

o The Equal Remuneration Act, 1976.

• After the enactment of the Code on Wages, all these four Acts will get repealed.

 

• Features of the Bill-

o The Code on Wages proposes a national level minimum wage which will be applicable to all employments in organised and unorganised sectors.

o A concept of statutory National Minimum Wage for different geographical areas has been introduced.

o The payment of wages through cheque or digital/ electronic mode has been proposed.

o Provision of an Appellate Authority has been made between the Claim Authority and the Judicial Forum.

o Penalties for different types of violations under this Code have been rationalized with the amount of fines varying as per the gravity of violations and repeat of the offences.

o Provision of compounding of offences has been made for those which are not punishable by a penalty of imprisonment.

o At present, Clause 53 (1) of the Code states that any employer who pays to any employee less than the amount due shall be punishable with fine which may be extended to Rs 50,000 and having been convicted of an offence, if the employer is again found guilty of similar offence within five years from the date of the first offence, shall be punishable with imprisonment for a term which may extend to three months or with fine which may extend to Rs 1 lakh or with both.

o As per the current version of the Code, Clause 51 defines the role of the facilitator who may supply information and advice to employers and workers concerning the most effective means of complying with the provisions of the Code and inspect the establishment based on inspection scheme, as would be notified by the government.

• Subsequently, it was referred to the Standing Committee on labour.

• Now, the standing committee has finalized its recommendations.

 

Highlights of the recommendations of the standing committee

• It recommended maximum penalty of Rs 10 lakh instead of Rs 50,000 for employers who pay less than the amount due to employees.

• Consultation with states before fixation of National Minimum Wage by the central government.

• It also suggests that the use of the term ‘facilitator’ instead of ‘inspector’ in the Code looks like dilution of the enforcement mechanism and restricts inspection which is “the lifeline of enforcement” and has recommended substituting the word ‘facilitator’ by ‘inspector’.

• The panel also felt that the definition of ‘Wages’ given in the Code is lengthy and needs clarification.

• A clarification may be required so that the concept of minimum wage is actually ‘the minimum wage at the time of entry/initial wage’ and that experience/loyalty/years of service are to be taken into account’ over and above the minimum wage.

• Following these recommendations by the Standing Committee, the Ministry of Labour and Employment is now expected to incorporate the changes and send it to the Union Cabinet for its approval, following which the Bill will be considered for passage by the Parliament.

 

Significance of the bill

• The Codification of the Labour Laws will remove the multiplicity of definitions and authorities leading to ease of compliance without compromising wage security and social security to the workers.

• It will ensure that no State Government fixes the minimum wage below the National Minimum Wages for that particular area as notified by the Central Government.

• Payment through digital mode would not only promote digitization but also extend wage and social security to the worker.

• Provision for Appellate authority which will lead to speedy, cheaper and efficient redressal of grievances and settlement of claims.

• The new Code on Wages will ensure minimum wages to one and all and timely payment of wages to all employees irrespective of the sector of employment without any wage ceiling.

• It will remove hindrances to growth as well as job creation.

• It will also attract foreign investment and improve our ranking in ease of doing business.

• Bringing all laws down to four or five shall lead to homogeneity of definitions which reduce arbitrage.

 

Section : Economics

Centre tightens rules for selling online

The News

• The Ministry of Commerce issued a clarification regarding the Consolidated FDI Policy Circular 2017. 

 

Background

• There are complaints from Indian retailers and traders, who say the giant e-commerce companies are using their control over inventory from their affiliates, and through exclusive sales agreements.

• It is creating an unfair marketplace that allows them to sell some products at very low prices.

• The All India Online Vendors Association (AIOVA) in October filed a petition with the anti-trust body Competition Commission of India (CCI) alleging that Amazon favours merchants that it partly owns, such as Cloudtail and Appario.

• The lobby group filed a similar petition against Flipkart in May, alleging violation of competition rules through preferential treatment for select sellers.

• The new regulations are followed by such complaints for unfair trade practices.

 

About the Consolidated FDI Policy Circular 2017

• The Department of Industrial Policy and Promotion (DIPP), Ministry of Commerce & Industry, Government of India makes policy pronouncements on FDI through Press Notes/Press Releases which are notified by the Reserve Bank of India as amendments to the Foreign Exchange Management Regulations.

• To consolidate such pronouncements, in 2017, the Government has put a transparent, predictable and easily comprehensible policy framework on Foreign Direct Investment in place.

• This framework is embodied in the Circular on Consolidated FDI Policy, which may be updated every year, to capture and keep pace with the regulatory changes, effected in the interregnum.

• Under the existing rules foreign investors can acquire 100 percent of e-commerce companies.

• The confusion was over market based model and inventory based model of e-commerce.

• Now, the Ministry of Commerce has issued a clarification regarding e-commerce in the existing FDI policy.

 

About Inventory based and market based model of e-commerce

• The inventory-based model of e-commerce: It is when the inventory of goods and services is owned by the e-commerce entity and sold to consumers directly.

• The marketplace model: It is when an e-commerce company simply provides an information technology platform in order to act as a facilitator between the buyer and the seller.

 

Highlights of the news

• The Ministry of Commerce issued a clarification regarding the Consolidated FDI Policy Circular 2017. It clarified that-

• 100% FDI under automatic route is permitted in marketplace model of e-commerce and FDI is not permitted in inventory-based model of e-commerce.

• E-commerce firms cannot hold stake in, or control vendor selling through its platform.

• Such an ownership or control over the inventory will render the business into inventory-based model.

• Inventory of a vendor will be deemed to be controlled by e-commerce marketplace entity if more than 25% of purchases of such vendor are from the marketplace entity or its group companies.

• E-commerce companies would be barred from selling products sourced from firms in which they have stake in or control over.

• From the point of view of the vendor too, the clarification said that an entity with equity stake owned by an e-commerce marketplace entity or its group companies, or having control on its inventory by e-commerce marketplace entity or its group companies, will not be permitted to sell its products on the platform run by such marketplace entity.

• The clarification also said an e-commerce marketplace will not force any seller to sell any product exclusively on its platform.

• It also said that the cash back that customers get as an incentive while online shopping should not be based on whether the product was purchased from an affiliate of the platform or not.

• The new rules will be applicable from February 1.

• E-commerce marketplace entity will be required to furnish a certificate along with a report of statutory auditor to Reserve Bank of India, confirming compliance of the guidelines, by September 30 every year for the preceding financial year.

 

Significance of the move

• The clarification is targeted at plugging loopholes in the earlier policy.

• It will help small traders and farmers who fear that U.S. companies are making a back door entry into India's retail market and could squeeze out small corner shops that dominate Indian retailing.

• The new rules will put an embargo on the tactics adopted by the global players to control and dominate retail trade in India through e-commerce.

• If the order is implemented in full then malpractices, predatory pricing policies and deep discounting by e-commerce players will no longer occur.

 

About the Competition Commission of India (CCI)

• Competition Commission of India is a statutory body of the Government of India.

• It was established on 14 October 2003.

• The Competition Commission of India (CCI) is sought to fulfill the objectives of the Competition Act, 2002, that prohibits anti-competitive agreements, abuse of dominant position by enterprises and regulates combinations (acquisition, acquiring of control and M&A), which causes or likely to cause an appreciable adverse effect on competition within India.

• CCI consists of a Chairperson and 6 Members appointed by the Central Government.

• It is the duty of the Commission to eliminate practices having adverse effect on competition, promote and sustain competition, protect the interests of consumers and ensure freedom of trade in the markets of India.

• The Commission is also required to give opinion on competition issues on a reference received from a statutory authority established under any law and to undertake competition advocacy, create public awareness and impart training on competition issues.

 

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Section : Economics