Home / Companies / Start-ups /  Evolution of business models in the era of privacy by design

BENGALURU : The right to privacy became a talking point in India two years ago when the Supreme Court upheld the overall validity of Aadhaar while disallowing its mandatory linking to services other than government benefits or subsidies. Last year, a committee headed by Justice B.N. Srikrishna proposed a data protection bill, which is still under consultation with multiple stakeholders.

As hundreds of millions of Indians come online with budget smartphones and the world’s lowest mobile data rates, Prime Minister Narendra Modi referred to data as the “new gold" at the recent Howdy Modi event in Houston. US President Donald Trump, on his part, hailed Indian Americans for helping revolutionize technology to improve lives around the world.

And Google CEO Sundar Pichai pitched in by acknowledging concerns over privacy while pointing out the need to balance that with the benefits of a shared internet.

The big question is, ‘Whose data is it, anyway?’ What if tech companies were forced to compensate customers for using their data to derive profits?

Entrepreneurs and investors are thinking of new paradigms beyond government regulation.

Tim Berners-Lee, for example, wants to restore the original intent of his creation—the World Wide Web, which he feels big tech companies have taken over. His startup Inrupt is creating virtual personal online data stores (PODs) where users can “create, manage and secure" their data. They can then trade their data for services.


In India, the Reserve Bank of India (RBI) has created a new entity called “account aggregator", backed by technocrat Nandan Nilekani who was also behind Aadhaar and UPI. Approved account aggregators will act as intermediaries between companies seeking customer data and institutions like banks that can provide the data.

Aggregators will take consent of customers on what data can be shared for how long and for what purpose. The framework will make it easier for customers and small businesses to access their financial data from multiple sources for things like access to credit.

Currently, although tech companies routinely take a user’s consent to access their data—such as identity or location, before providing a product or service, it’s so convoluted that most people have to acquiesce blindly. Companies harvest all the data they can and use it in ways that customers can’t even imagine. New frameworks aim to hand control back to users.

Entrepreneurs and investors are also thinking of ways in which privacy can evolve from just ticking the boxes for compliance.

“Privacy 2.0 should focus on trust," says Govind Shivkumar, principal at Omidyar Network India. “If consumers begin to trust some players more than others, companies will want that as a differentiating factor and competitive advantage."

This would make privacy a strategic priority instead of a compliance headache.

The trust-based framework would eventually evolve into Privacy 3.0 where it would be embedded into businesses.

An Omidyar Network India and Monitor Deloitte India paper that Shivkumar helped prepare sees the emergence of new business models, including personal data stores like Tim Berners-Lee envisages, tools for users to manage their preferences, and so on.

There would also be new B2B (business-to-business) models such as privacy services for enterprises, some of which could be artificial intelligence-led. Privacy certification agencies would come up to close the loop.

“We’re looking at investment opportunities in startups across all three levels of privacy, from compliance to trust and Privacy 3.0 models," says Shivkumar.

“Our notion of privacy is rooted in individuals’ control over what they share and how they manage their lives on digital platforms," adds Sushant Kumar of Omidyar Network India, who works on “responsible tech investments."


What complicates it is that technologies are fast-evolving, especially with the application of AI in virtually every sphere. “Technology should be publicly managed," says Anupam Guha, assistant professor at Centre for Policy Studies, IIT Bombay. “But it can’t be a simplistic state-controlled thing because you can’t trust the state."

His view is that public or community-led models, which are pro-people rather than pro-corporate or pro-state, can form. “If you want to forestall the problems we’re seeing with monopolies, privacy or job losses from automation, you can choose to incentivise models that produce better results for the common man."

Proclaiming that data is the “new oil" or “new gold" suggests wealth creation. The question is for whom wealth is being created. Public discourse is veering towards a consumer-centric view.

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