Data Protection Challenges for Global Capability Centres (GCCs) under DPDPA

Data Protection Challenges for Global Capability Centres (GCCs) under DPDPA

Global Capability Centres (GCCs) face a myriad of data protection challenges, especially under the framework of India’s Digital Personal Data Protection Act (DPDPA). These challenges stem from the need to comply with complex regulations while managing vast amounts of personal and sensitive data. Below, we explore the major data protection challenges for GCCs under the DPDPA.

1. Navigating Complex Data Privacy Laws

GCCs must navigate a complex web of data privacy laws that vary significantly across jurisdictions. This complexity is compounded by the DPDPA’s specific requirements, which may differ from other global data protection laws, making compliance a challenging task for GCCs operating in multiple regions 

2. Cross-Border Data Transfer and Localization

The transfer of personal data across borders is a critical concern for GCCs. The DPDPA requires organizations to store at least one serving copy of personal data on a server or data center located in India, which can complicate data management for GCCs that operate globally 

3. Handling Sensitive Employee Data

GCCs often handle sensitive employee data, including personal identification information, performance evaluations, and health records. The DPDPA mandates stringent data protection measures for such data, requiring GCCs to implement robust security protocols to prevent unauthorized access and breaches 

4. Compliance with Consent and Privacy by Design

The DPDPA emphasizes obtaining informed consent and implementing privacy-by-design principles. GCCs must ensure that they collect and process personal data in compliance with these principles, which can be resource-intensive and require significant changes to existing data handling practices 

5. Managing Third-Party Vendor Risks

GCCs often rely on third-party vendors for data processing and storage. The DPDPA requires organizations to conduct due diligence and ensure that third-party vendors comply with data protection standards, adding another layer of complexity to data management 

6. Adapting to Emerging Technologies

The rise of artificial intelligence and other emerging technologies presents new challenges for data privacy. The DPDPA’s consent-centric regime may pose challenges for AI training and development, as it limits the legal bases for processing personal data, potentially hindering innovation 

7. Conducting Data Protection Impact Assessments (DPIAs)

Under the DPDPA, significant data fiduciaries are required to conduct Data Protection Impact Assessments (DPIAs) to identify and mitigate privacy risks. GCCs classified as significant data fiduciaries must establish internal processes for conducting DPIAs, which can be resource-intensive 

8. Ensuring Compliance and Avoiding Penalties

Failure to comply with the DPDPA can result in significant penalties, including fines of up to INR 500 crore or 2% of global annual turnover. GCCs must invest in compliance measures to avoid these penalties and protect their reputational standing 

Conclusion

The DPDPA presents several data protection challenges for GCCs, ranging from compliance with complex regulations to managing third-party risks and adapting to emerging technologies. By understanding these challenges and implementing robust data protection measures, GCCs can navigate the regulatory landscape effectively and safeguard personal data.

To know more about how AMLEGALS specialised lawyers team on DPDPA can hep GCC in India, connect with us on dataprivacy@amlegals.com.

5 Q&A for GCC on Data Privacy Challenges under DPDPA

1. What are the major data protection challenges for GCCs under the DPDPA?

GCCs face several data protection challenges under the DPDPA, including navigating complex data privacy laws, managing cross-border data transfers and localization, handling sensitive employee data, ensuring compliance with consent and privacy by design principles, managing third-party vendor risks, adapting to emerging technologies, conducting Data Protection Impact Assessments (DPIAs), and ensuring compliance to avoid penalties 

2. How does the DPDPA affect cross-border data transfers for GCCs?

The DPDPA includes provisions for regulating cross-border data transfers, requiring GCCs to assess their data transfer mechanisms to ensure compliance. This may involve changes in data infrastructure and storage practices to meet the data localization requirements, which mandate that a copy of all personal data be stored in India 

3. What role does consent play in data processing under the DPDPA for GCCs?

The DPDPA emphasizes obtaining explicit and informed consent from data subjects for data processing. This requirement can make obtaining consent for various processing activities more complex, necessitating a robust consent management system. The introduction of a ‘consent manager’ role can help GCCs manage, review, and withdraw consent effectively 

4. What are the additional compliance obligations for GCCs categorized as Significant Data Fiduciaries (SDFs)?

GCCs that process a significant amount of personal data or handle data critical to national interests may be categorized as Significant Data Fiduciaries (SDFs). These entities have additional compliance obligations, including conducting data protection impact assessments, audits, and appointing a Data Protection Officer (DPO) to ensure compliance with the DPDPA 

5. How can GCCs ensure compliance with the DPDPA and avoid penalties?

To ensure compliance with the DPDPA, GCCs can set clear accountability, adopt a risk-based approach, leverage technology to streamline privacy operations, create a privacy-aware culture, and conduct regular audits and continuous improvement. Appointing a Data Protection Officer or creating a Data Privacy Office that reports to senior leadership can also help prioritize privacy within the organization. 

To know more about how AMLEGALS can hep GCCs in India, connect with us on dataprivacy@amlegals.com.