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Penalties and Enforcement under the DPDPA

The Digital Personal Data Protection Act (DPDPA), 2023 is not just a statement of rights and duties; it is a binding law with real consequences for non-compliance. To ensure that organizations treat personal data with seriousness, the Act empowers the Data Protection Board of India to enforce compliance and impose penalties when violations occur.

  • Enforcement by the Data Protection Board
    The Data Protection Board of India acts as the enforcement authority under the Act. It investigates complaints, oversees data breach reports, and conducts inquiries into violations. The Board has the power to summon organizations, demand evidence, and issue binding directions. It can also order an entity to stop unlawful data processing, implement corrective measures, or improve its security safeguards.

  • Financial Penalties for Violations

    Critical Point

    The Act prescribes significant monetary penalties to deter negligence and misconduct. Depending on the severity of the violation, fines may reach up to ₹250 crore.

    Example

    An organization that fails to take reasonable security measures and suffers a large-scale breach exposing millions of users’ Aadhaar-linked phone numbers could face one of the highest categories of fines.

  • Types of Violations Covered
    Penalties can be imposed for a wide range of failures, including:

    • Not implementing reasonable security safeguards.
    • Failing to report a personal data breach within the required time.
    • Ignoring or denying the rights of Data Principals, such as refusing to erase or correct personal data.
    • Using personal data for purposes beyond what was consented.
    • Failing to establish a grievance redressal system.
    • Non-compliance with directions of the Data Protection Board.

  • Impact on Individuals and Businesses
    Unlike many earlier laws in India, the DPDPA makes enforcement practical and transparent. If a company like ABC E-Commerce Pvt. Ltd. were found guilty of mishandling customer data and ignoring complaints, the Board could penalize it heavily, require it to fix its practices, and even issue public disclosures that damage the company’s reputation.

  • Appeals Process
    Any entity aggrieved by the decision of the Board can file an appeal before the Appellate Tribunal. This ensures checks and balances, so that penalties are not imposed arbitrarily.

  • Beyond Monetary Fines
    While financial penalties are the most visible consequence, the reputational and operational impact can be far greater. A single breach notification or enforcement action may result in loss of customer trust, reduced investor confidence, and long-term harm to brand value.

In short, the enforcement mechanism under DPDPA ensures that compliance is not a matter of choice but a legal obligation. By empowering the Data Protection Board to act decisively and by attaching meaningful financial and reputational risks, the Act compels organizations to take privacy seriously and to treat the protection of personal data as a non-negotiable responsibility.