Implied Consent and Legitimate Use: A Critical Loophole in India’s DPDP Act, 2023

Introduction: The Promise and Peril of India’s New Data Privacy Framework

India’s DPDP Act, 2023 represents a landmark attempt to balance individual privacy with legitimate data use. The Act confines data processing in two bases: the Data Principal’s consent, or certain “legitimate uses” defined in Section 7. Ideally, consent under Section 6 must be “free, specific, informed, unconditional and unambiguous” with a “clear affirmative action” by the Data Principal. However, Section 7(a) creates an exception: a fiduciary may process data “voluntarily provided” for a “specified purpose” so long as the principal has not indicated non-consent. This framework can effectively turn silence into consent.

While the DPDP Act empowers Data Principals with withdrawal rights and grievance mechanisms, the interplay of Sections 6 and 7 raises questions:

Does non‑objection to a use count as valid consent?
Are Data Fiduciaries allowed to exploit passive acquiescence to process data beyond what was expressly consented to?
Given that the Act applies uniformly across sectors (finance, healthcare, e‑commerce, telecom, etc.), any ambiguity impacts compliance industry-wide.

This article isolates the consent/legitimate‑use tension as a latent compliance problem, analyzes its doctrinal aspects and practical risks, and recommends targeted reforms.

The Hidden Trap: Where Silence Becomes Consent

The specific ambiguity lies in Section 7(a), which essentially permits implied consent. It states that a fiduciary may process personal data for the “specified purpose” voluntarily provided by the principal, if she has not “indicated that she does not consent” to that use. In effect, once a Data Principal hands over her data for a given purpose, the fiduciary may presume permission for that purpose unless the principal speaks up. This stands in stark contrast to Section 6(1), which demands affirmative, informed consent for processing.

The problem manifests in practice: imagine a mobile app that collects an email address to send a purchase receipt. Section 7(a) would allow the app to use that email address for any related notifications or upselling, unless the user explicitly opts out. But Section 6 would ordinarily require the app to obtain specific consent for each new purpose. Which rule governs? The Act itself does not spell out how to reconcile this.

Compounding the issue, the Act places the onus on the Data Principal to withdraw consent, but then says the Data Principal bears the consequences of withdrawal and that processing prior to withdrawal remains lawful. Thus, unless the principal actively revokes, the fiduciary may continue processing. Under Section 6(6), even after withdrawal the fiduciary need only stop processing “unless authorized under the Act,” which could be interpreted to include Section 7 legitimate uses.

From a compliance standpoint, this dynamic can become a loophole: Data Fiduciaries across sectors might treat passive data provision as consent, potentially without giving users a meaningful chance to say no. Data Principals may remain unaware that silence is being construed as permission. This raises legal and policy questions about the depth of “consent” protection in the Act.

Statutory Schizophrenia: When Laws Contradict Themselves

Textual Tension

The Act’s text highlights the tension. Section 4(1) frames processing as lawful only if it is either with consent or a legitimate use. Section 6(1) then defines consent in stringent terms: a “clear affirmative action.” Yet Section 7(a) effectively creates a third category: implied consent by inaction. Here, consent is presumed from voluntary data provision, absent an explicit objection.

Under standard rules of statutory interpretation, a specific provision (Section 7) may limit a general rule (Section 6) if intended as an exception. Section 7 is explicitly labeled “Certain legitimate uses,” suggesting these are carve-outs from the consent requirement. However, Section 7(a) drafting is unusually broad. It does not simply say “without consent,” but “without having indicated non-consent.” Because most users will not actively indicate anything, any use within the specified purpose can proceed by default.

This contradicts the Act’s own consent definition. Section 6(1) borrows from the EU GDPR standard, which forbids inferred silence as consent. The GDPR Recital 32, states that consent must be given “by a statement or by a clear affirmative action” (meaning that silence or inactivity does not constitute consent). By contrast, Section 7(a) reverses the default. This creates an ambiguity: does “affirmative action” in 6(1) still matter if 7(a) allows processing without it? A textualist would ask: can a negative indication (“not indicated” in 7(a)) ever satisfy the “clear affirmative action” of 6(1)?

It seems not. The only way to square them is to treat Section 7(a) as an exception: only the data provision itself (for the purpose the principal knew about) is covered. In other words, processing that is strictly within the original specified purpose may proceed even without an explicit fresh consent, as long as no objection is raised. But this depends on defining “specified purpose” tightly. The Act’s Section 2(za) defines “specified purpose” as the purpose in the notice to the principal. Thus, arguably, Section 7(a) should apply only to the precise purpose the principal volunteered data for. Any processing beyond that would lack both an affirmative consent and an implied “lack of objection,” violating both Section 6 and 7(a).

However, Section 7(a) is not expressly limited to only “the notice purpose.” The illustrations suggest a modest use case (a pharmacy sending a receipt after a purchase), but the text itself could be read more expansively and can dilute the data privacy. If broad, it risks undermining the principle of purpose limitation, a core tenet in data protection law.

Doctrinal and Policy Implications

From a doctrinal perspective, this ambiguity could be resolved by favoring the more privacy-protective interpretation. The DPDP Act’s preamble emphasizes individuals’ right to protect personal data. Indian jurisprudence (e.g., Puttaswamy v. Union of India, 2017) has recognized privacy as a fundamental right under Article 21. One might argue that any ambiguity should be resolved to enhance, not dilute, individual control. Under that approach, Section 7(a) could be read narrowly: voluntary provision only legitimizes the exact purpose made known, and any silence cannot be automatically treated as consent beyond that scope. Regulators could clarify that Section 7(a) does not absolve fiduciaries from obtaining fresh consent or at least giving notice for any new or secondary purposes.

Yet the plain text allows a fiduciary to treat silence as consent within the specified purpose. Data Fiduciaries may interpret the law literally: “If the Data Principal has not indicated non-consent, we may proceed.” In cross-industry practice, this could lead to various Superfluous situations like e-commerce platforms using a purchase-related email also for marketing announcements, telecom providers reusing call records for promotions, or healthcare apps sharing volunteered demographic data with third-party researchers, so long as users have not opted out. Each of these sectors would be regulated by the DPDP Act, but likely none have explicitly sought such uses. The “implied consent” model thus risks creating a de facto tier of processing far wider than Data Principals might expect.

From the Data Principal’s perspective, this setup is problematic. The Act hands them the right to withdraw consent “at any time, with ease comparable to giving,” but it does not guarantee they have actually seen every potential use to object to. In effect, the principal must be vigilant and informed not only about the initial purpose but any secondary uses, and must proactively signal dissent. This is a departure from privacy-by-default, placing a heavy burden on individuals. It also clashes with modern consent theory: meaningful consent requires understanding of and agreement to each use.

From the Data Fiduciary’s perspective, however, Section 7(a) offers flexibility. Companies in all sectors could leverage this clause to minimize friction: they need not interrupt a user experience with repeated consent dialogs for each related purpose, as long as “voluntary provision” and silence can be documented. But this creates a trap. If regulators or courts later find that a use went beyond what a reasonable person would have expected, the fiduciary could be in breach, despite its reading of the Act. The Act does give the Data Protection Board investigative powers, but evidence of “indication” or “lack thereof” may be ambiguous.

Adding to the challenge, Section 6(6) implicitly cross-references Section 7 by allowing continued processing after withdrawal if “required or authorized by this Act.” One might read that as covering all of Section 7’s legitimate uses. If so, even after a user withdraws, the fiduciary might claim “we’re still allowed under Section 7(a) – you didn’t object originally, and it’s the same purpose.” This could further weaken the withdrawal right in practice.

Indeed, the broad list of legitimate uses in Section 7 amplifies the issue. For instance, clause (i) permits processing for “purposes of employment” or protecting an employer’s interests (e.g., “corporate espionage, confidentiality of trade secrets“). In a sense, an employee’s personal data may be processed without explicit consent to safeguard the company. Many employees may not realize their silence is treated as consent for such monitoring. Similar concerns arise under clauses (b)–(h) (government benefits, legal obligations, medical emergencies, etc.), but these are generally more intuitively expected by individuals. Clause (a) in particular cuts across all civilian transactions, making it the most pervasive and thus the most significant loophole.

In sum, the Act’s consent framework reflects a partial convergence of GDPR style affirmative consent with a Singapore style legitimate interest approach. The ambiguity, whether and when silence equals consent, is real and could lead to inadvertent non‑compliance by Data Fiduciaries and erosion of Data Principal trust. The Act itself offers no clear mechanism (beyond Section 6(4) withdrawal) to address this gap.

Comparative Perspective: How Other Jurisdictions Treat Consent

India’s Section 7(a) of the DPDP Act stands out globally for permitting data processing if a user has not indicated non-consent, effectively enabling implied consent through silence. This contrasts with most global privacy laws that mandate explicit, affirmative consent and disallow such inaction-based permission.

Key Comparisons:

EU GDPR: Explicit consent via affirmative action is mandatory. Silence or inactivity is not consent (Recital 32). “Legitimate interest” processing must pass a balancing test.
Brazil (LGPD) & China (PIPL): Consent must be informed and explicit. Processing without consent is allowed under tightly defined lawful bases. Silence is never treated as consent.
USA (CCPA/CPRA): Emphasizes consumer opt-out rights but does not permit consent-by-silence. Consent is required for data sales and sensitive data.
Canada (PIPEDA): Allows limited implied consent only where the purpose is obvious and reasonable—far narrower than India’s Section 7(a).
South Korea (PIPA) & Singapore (PDPA): Allow further processing without consent if predictable or balanced against user interests, but do not permit silence as implied consent.

India’s unique formulation allows fiduciaries to rely on passive acquiescence. A significant departure from global norms. This increases the risk of privacy erosion, especially in sectors where users may not anticipate secondary uses.

Implication: While Section 7(a) might offer operational convenience, it potentially undermines the core principle of meaningful, informed consent upheld by international regimes. There is growing consensus worldwide that silence should not equal consent, reinforcing the call for clarity and reform in India’s framework.

Bridging the Gap: Practical Solutions for a Flawed Framework

Legislative Clarification

At the statutory level, Parliament could amend Section 7(a) to eliminate the “not indicated” phrasing or to specify its limits. For example, the clause might be rewritten to require an affirmative opt-out or to restrict applicability strictly to the original notified purpose. A legislative note could be added: “Provided that processing under clause (a) shall be confined to the exact specified purpose as described in the notice, and any additional purpose shall require explicit fresh consent.” This would restore consistency with Section 6. If an amendment is not immediately feasible, at least an Explanatory Statement or Ministerial Gazette notification could clarify that Section 7(a) is not intended to override the “affirmative action” rule.

Rule‑making and Guidelines

In the interim, the Data Protection Board should issue binding guidelines. These might require Data Fiduciaries to obtain explicit confirmation (via a one-click opt-in or clear checkbox) if they wish to use data beyond the initial context. The Board could also prescribe standards for “notice” under Section 5 to ensure clarity: e.g., whenever a Data Fiduciary invokes Section 7(a), it must provide a prominent notice (via email or app alert) stating the specific use and offering an immediate opt-out. In effect, what is currently silent consent would become a true “consent by notice with opt-out.”

Specifically, guidelines could mandate that any use under Section 7(a) be accompanied by an opportunity for the Data Principal to communicate dissent easily (possibly via the new “consent manager” mechanisms in Section 6(7)–(9)). For instance, the Board could require fiduciaries to integrate with registered Consent Managers, allowing individuals to flag negative consent once (and have that decision propagate automatically to all relevant fiduciaries). This would implement the Act’s spirit of portability and control, and ensure that “not indicated non-consent” is replaced with an active consent management regime.

Administrative Enforcement

Regulators should monitor this area closely. The Board and appellate tribunals must scrutinize whether consent under Section 7(a) was truly informed in investigations of breaches. Enforcement policies should emphasize that doubt falls on the fiduciary: if a Data Principal complains that they were unaware of a data use, the burden should be on the fiduciary to show clear evidence of non‑objection. In practice, this means keeping logs of notices and “no objection” records. Repeated non-clarity could be subject to higher penalties under the Act.

Sectoral Collaboration

Cross-sector regulators (like the RBI, IRDAI, TRAI, etc.) should issue clarifications aligned with DPDP. For example, the banking regulator might instruct banks to treat marketing to existing customers as requiring fresh consent, unless customers explicitly opt in. Such sectoral norms would help harmonize practice.

Together, these measures – legislative, regulatory, and administrative would close the silent-consent gap without unduly hampering legitimate processing. They respect the Act’s stated goals by ensuring that consent truly remains “free and informed,” rather than assumed by default. Importantly, these solutions are implementable: consent preferences can be captured digitally, and guidelines can be rolled out via the DPDP Board’s rule-making authority under Sections 33–34.

Conclusion: Closing the Loophole Before It Becomes a Chasm

The DPDP Act, 2023 marks a significant advance for Indian data privacy, but its novel approach to “legitimate use” creates a slippery slope. The tension between Section 6 affirmative consent standard and Section 7(a) implied-consent regime is a cross-industry compliance flashpoint. Without intervention, fiduciaries may treat silence as consent, while principals may unintentionally forfeit their privacy rights.

Regulators and legislators should clarify that processing under Section 7 is tightly circumscribed to preserve the Act’s balance between privacy and utility. We recommend narrow interpretation and rule-making that require meaningful notice and straightforward opt-out mechanisms for any use beyond the original scope. Such clarifications would align India’s framework more closely with global norms, bolster Data Principal trust, and give Data Fiduciaries clear rules of the road. In short, closing this loophole is essential to making the DPDP Act not just ambitious in theory, but strong in practice.