India Business Law Journal –  December 2022/January 2023

Tightening the grip

Global tech companies feel pressure from data laws

The past few years have shown a trend with the Indian government and regulators to put in place controls over global tech companies and their seemingly unfettered power. These moves are part of a shift that is happening around the globe, with states looking to shore up their data protection laws and establish data regulators, which has left multinational companies scrambling to catch up.

Back when Meta founder, Mark Zuckerberg, visited India in 2014, he said the country had “unlimited potential” and there was room for a “lot of growth” for his company. However, the picture may not be as rosy as previously expected.

Our Cover Story explores whether the time is right for a developing economy like India to tighten its grip over the tech giants. Among notable laws to be passed is the introduction of the Digital Personal Data Protection Bill, 2022, which is expected to be introduced to the parliament this year.

The bill sets out strict requirements for obtaining consent from individuals for using personal data. Concerns about the data protection bill include data localisation provisions that limit the transfer of data freely across borders, and stiff penalties of up to INR2.5 billion (USD30 million) for failure to prevent data breaches.

Similarly, waiting in the wings is the Competition Amendment Bill, which is expected to be passed in the budget session of parliament that will be ongoing until 6 April. Aimed at scrutinising M&A activity in the economy, the bill proposes a deal value threshold of INR20 billion for transactions that will become reportable under the Competition Act.

Further adding to the worries of multinational companies is the decision of the government to form a committee to prepare a draft digital competition bill by May 2023. Internet and tech industry body, the Asia Internet Coalition, has voiced concerns that the move will restrict competition and innovation.

In this month’s Spotlight, we examine the outcome of a survey conducted by our sister publication Asia Business Law Journal on a key issue of how in-house counsel critically evaluate and select a particular law firm to work with. This article looks at the criteria and parameters that an in-house counsel consider for associating with a law firm, and the role played by factors such as cost and turnaround time. Particular turnoffs for in-house counsel make valuable reading for law firms, even those with long established client relationships.

This month’s Intelligence Report sees the return of the In-house Counsel Awards, in which we applaud and celebrate general counsel and their teams for their achievements in the past year. The GCs named in our feature have built legal teams from scratch, guided their companies through troubled times and achieved near perfect success rates in courts for recovering monies locked away in litigation.

They have also introduced contract management systems, systems for compliance and other innovations to speed up turnaround times. We express our thanks to our nominees who evaluated the performance of our winners, and extend our congratulations to all of our deserving winners for the year.

In Man on a mission, we interview eminent legal luminary Lalit Bhasin in commemoration of his 60th year in the legal field. As Bhasin reveals aspects of his early life and his legal journey, the conversation manoeuvres from the personal to the professional as he expresses commitment to furthering the legal profession. He talks of his roles as president of the Indo American Chamber of Commerce and the Society of Indian Law Firms, and declares he has a duty to the community as a whole, over professional expansion and monetising opportunities for personal gains. Peppered with anecdotes from the past, Bhasin’s ideas of justice resonate throughout the interview.

In The Briefing, we look at alternative investment funds (AIFs) reaching a happy compromise with the Securities and Exchange Board of India (SEBI). The SEBI recently notified several AIFs for failing to honour the timeline of funds specified in their offer documents, with the fate of at least 67 AIF schemes in abeyance.

However, there is some relief on the horizon, with the SEBI proposing that funds could carry forward unliquidated investments to a new plan. The SEBI’s proposed rollover seeks to maintain a balance between investor interest and timely liquidation of funds, while enabling dissenting investors to exit at a valuation from two independent valuers.

Finally, our Future Legal Leaders report delves into the attributes that clients and peers have most commonly identified for the lawyers that receive this honour. Our report finds that it is the qualities of possessing in-depth knowledge about their field, being client-oriented and efficient, and possessing an ability to simplify complicated subjects that our nominees have admired most.

Some of our Future Legal Leaders have already reached the stage of their careers where they work alongside managing partners on multibillion-dollar deals, while others are confident enough to set out on their own and attract work solely on their reputation. Their stories convince us that an even brighter future is in store for our lawyers.