Cyber Security Compliances For Doing E-Commerce Business In India

Legal and regulatory compliances are sine quo non for the performance of any business in a legal manner. In the present times, these legal compliances have become very technical and cumbersome. This is more so when e-commerce business sis involved.

E-commerce business involves information and communication technology (ICT) for its conduct and operation. ICT introduces additional challenges like conflict of laws in cyberspace for various e-commerce stakeholders and law enforcement agencies. Cyber security challenges are also faced while doing e-commerce business.

E-commerce business is flourishing at a great speed in India. Most of the e-commerce entrepreneurs are concentrating upon commercial aspects with an eye upon profit motive. In this race they are ignoring techno legal requirements that may affect their rights in the long run.

For instance, e-commerce laws in India are spread across multiple legal frameworks and they are seldom followed by Indian e-commerce stakeholders. Even foreign e-commerce players and portals are required to be registered in India and comply with Indian laws.

Similarly, e-commerce players are required to comply with cyber law and cyber security regulatory compliances in India. A dedicated law for cyber security breaches disclosures is also in pipeline that would impose stringent obligations upon e-commerce players operating in India. Companies that would fail to comply with the cyber law due diligence requirements in India may be punished according to Indian laws.

The cyber security challenges for Indian companies are very difficult to manage in the absence of proper planning and management. Directors of Indian companies and e-commerce websites can be held liable for improper cyber security dealings in India.

Thus, cyber security regulatory compliances issues of e-commerce businesses in India cannot be ignored by various stakeholders except at the risk of litigations and heavy monetary compensations.

China Plans To Enact National Security Law

China is planning to formulate a comprehensive national security law amid rapidly changing circumstances in online and off line worlds. However, like other countries, China has also stressed too much upon regulation and intelligence dependence than balancing the national security and civil liberties requirements. China has also decided to launch its own operating system to remove dependence upon foreign operating systems.

The proposed law seeks to punish companies and individuals engaged in spying and espionage activities. It also includes provisions pertaining to sealing, seizure and confiscation of device, money, venue, supplies and other properties that are related to espionage activities. Illegal income attributable to such activities can also be confiscated.

On the other hand, the national security policy of India is grossly deficient on numerous counts. The biggest lacuna is that it lacks a techno legal orientation and implementation. There are certain essential components of national security policy of India that are still missing. Even the national cyber security policy of India is defective and is still not implemented.

India has been planning to undergo technological upgrade of border broadcast infrastructure due to Chinese broadcasts. The Telecom Commission Cellular Loop’s Proposal would also strengthen mobile based surveillance on national security grounds in India. However, absence of a techno legal national security law of India is the biggest hurdle.

Indian Directors Can Be Held Liable For Faulty Cyber Security Practices

The company law of India has been recently reformulated and notified in the form of Indian Companies Act, 2013 (Pdf). It has given rise to many novel techno legal obligations on the part of directors of various companies that were absent in the former company law framework. For instance, directors of Indian companies can now be held liable for cyber law and cyber security related lapses. Even law firms and other firms holding their client’s data can be held liable for cyber breaches.

The cyber security trends in India (Pdf) provided by Perry4Law’s Techno Legal Base (PTLB) has stressed upon a need to secure participation from various stakeholders. Indian government needs to be more stringent while getting cyber security related compliances enforced by Indian companies and their directors. However, till now various companies and their directors are not complying with techno legal requirements of Indian laws.

Recently E-Bay asked for change of passwords by its users after breach of its database containing account information. Before that Target Corporation was targeted by cyber criminals and as a result of that Target Corporation faced litigation threats around the world. Indian companies and banks are also no different as cyber breaches in India have increased significantly. This is the reason that Indian government is planning to formulate a law where cyber security breaches would be required to be disclosed to designated Indian agencies.

Cyber security challenges in India are tremendous and there is an urgent need to tackle them immediately. It would take considerable amount of money and energy to establish a sound and robust cyber security infrastructure of India. The present trends have also shown that Indian companies and government is all set to increase spending on cyber security infrastructure. A good portion of it must be allocated to meet techno legal compliances so that company’s reputation and business is not affected by cyber attacks and their public disclosures. 

Cyber Security Challenges In India

Cyber security breaches are increasing world over and India is also facing serious cyber threats. Malware like Stuxnet, Duqu, Flame, Uroburos/Snake, Blackshades, FinFisher, Gameover Zeus, etc have proved that companies and governments cannot remain aloof of cyber threats anymore. There are numerous cyber security challenges before the Narendra Modi government and the same must be addressed on a priority basis.

India has been facing shortage of skilled cyber security professionals. Further, indigenous hardware and software production is also not upto the mark. The electronic system design and manufacturing (ESDM) policy of India would be a landmark achievement in this regard. With local hardware and software competence and independence, we can better focus upon cyber security skills development in India.

India needs to work at the international diplomacy and cooperation levels as well. Recently India opposed the idea of including cyber security technologies under the Wassenaar Arrangement as till date India is not self dependent in this field. However, once local competence is achieved, such issues would not bother India anymore.

The cyber security trends in India (Pdf) provided by Perry4Law’s Techno Legal Base (PTLB) has stressed upon development of cyber security capabilities in India. This includes both offensive and defensive cyber security capabilities of India. Dr. APJ Abdul Kalam has reiterated the need for such capabilities on numerous counts.

India is also required to align her legal frameworks according to the contemporary developments. For instance, we need a dedicated cyber security law of India on the one hand and repeal of Indian cyber and telegraph laws on the other.

These cyber security challenges of India must be addressed as soon as possible as India has already delayed this issue for many years.

Develop Offensive Cyber Capabilities: A.P.J. Abdul Kalam

Cyberspace has become a complicated place these days. It is full of opportunities and challenges and our response should be guided by its changing nature. Cyber security trends in India (Pdf) are alarming and Indian government needs to take urgent steps to strengthen Indian cyber security. Present efforts of Indian government are insufficient to protect Indian cyberspace and has made India a sitting duck in cyberspace.

The worst affected area is offensive and defensive cyber security capabilities of India that are still missing. There is no cyber warfare policy of India (Pdf) and Indian critical infrastructures (Pdf) are also vulnerable to cyber threats and cyber threats. International legal issues of cyber security have become tremendously complex in nature due to conflict of laws in cyberspace. India has found herself in a position where she has no influence over this situation.

We need actual and implementable cyber security policy of India, cyber attacks crisis management plan of India, offensive and defensive cyber security capabilities for India, etc. Renowned scientist Dr. A.P.J. Abdul Kalam has also called for a more aggressive approach towards cyber security in India. “Offensive and defensive cyber capabilities are as important for nations to build as the nuclear capabilities. We will soon have only two types of nations – those with cyber offensive and defensive capabilities and those without,” he said.