Plea In SC Seeks To Block Trials Of Whatsapp Pay Citing Privacy Concerns

An application has been filed in Supreme Court by the Centre for Accountability and Systemic Change (CASC) seeking interim directions to completely stop alleged trials being conducted by WhatsApp Pay, Facebook's instant payment services pilot project, which is being carried out across a million users in India. It has been alleged that WhatsApp has illegally continued beta testing its payment services, despite being in violation of data localization norms prescribed by the Reserve Bank of India (RBI).

CASC contends that trials on a million users cannot be allowed to go on in a situation where RBI norms have been flouted, especially since the users' sensitive personal data will be stored outside India given the fact that a Grievance Officer has not been appointed in India by the US-based company. It has been stressed that allowing this trial will amount to reducing Indian users to guinea pigs.

"One million Indians cannot be reduced to guinea pigs. Their sensitive personal data, including financial data cannot be stored outside India in contravention to the RBI circular…Moreover, it has now been reported that WhatsApp Pay will be rolled out to more customers, despite there being no report submitted to this court about WhatsApp's full compliance with RBI Data localization norms".

The petitioner had filed a Writ in 2018 seeking directions from the apex court to ensure WhatsApp complies with the Data Localization Norms prescribed by the RBI in April 2018. It is WhatsApp's case that National Payments Corporation of India (NPCI) granted them permission to conduct trials in February 2018, before RBI prescribed those norms. In the present application, CASC argues that the RBI Circular mandated compliance of norms by October 2018, without exception, and also issued clarifications regarding the same by releasing FAQs in June 2019. It has further been alleged that WhatsApp has failed to put on Record a copy of the permission granted by NPCI to conduct trials and "has not brought all material facts before this Hon'ble Court". Blanket permission for conducting trials cannot be granted and it should be restricted by duration, the petitioner adds, to raise suspicions over the grant of permission. In light of this, all communication between WhatsApp and NPCI must be placed on record, seeks CASC.

The Supreme Court in August 2019 had directed RBI to submit a status report regarding WhatsApp's compliance with its norms and in November, the Central Bank responded in the negative, submits CASC. Reference thereafter is made to the incident of Pegasus Spyware to infer that secure data systems are required, and till the time WhatsApp is in full compliance with RBI norms they cannot be allowed to continue testing their Payment Services.

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