Data Breach and how to prevent it under DPDP Act

Sameer Ahirrao -

Your sensitive data such as financial information, medical records, or your Aadhaar number are just a few clicks away from falling into the wrong hands. Hackers don’t need cutting-edge tools to access your personal data. It is often easier than submitting a Google form. With over 100 million records exposed in recent years, India faces a looming crisis of personal data breaches. This isn’t a scene from a dystopian movie—it’s the stark reality of our digital landscape.

Your personal data is a goldmine and both companies and hackers are mining it freely, often without your permission. The Digital Personal Data Protection (DPDP) Act, with its strict rules and hefty fines, marks India’s most significant step yet toward safeguarding data privacy.

Why should businesses care?

The DPDP Act leaves no room for leniency when it comes to data breaches, and the consequences are enormous. It requires organizations to implement safeguards and be fully prepared to respond if a breach occurs. A single lapse can lead to severe financial setbacks, lasting reputational harm, and penalties that may reach up to ₹250 Crores.

What constitutes a Personal Data Breach?

Under the DPDP Act, a data breach refers to any incident where personal data meant to stay secure and private is exposed. This includes hacking, accidental leaks, or negligent handling. The definition is broad, covering any unauthorized or accidental access, disclosure, alteration, or loss that affects the confidentiality, integrity, or availability of personal data.

What does DPDP Act say about Personal Data Breaches

The DPDPA sets clear rules to help prevent personal data breaches and deal with them swiftly if they occur. It puts the onus on Data Fiduciaries essentially the businesses that control how and why your data is used to keep that data safe. They’re also responsible for making sure their partners or vendors (called Data Processors) follow the same standards when handling your information.

Breach Prevention Obligations

Data Fiduciaries are expected to follow a higher level of security practices to protect personal data. While the original Act didn’t define what "Reasonable Security Safeguards" meant, the draft rules break it down into actionable steps:

  • Encryption & Obfuscation: Use methods like encryption, masking, or tokenization to keep data unreadable to unauthorized users.
  • Access Control: Restrict access based on roles, use multi-factor authentication, and regularly review who can access what.
  • Monitoring & Logs: Keep track of who accessed what data and when—logs must be stored for at least a year.
  • Backup & Recovery: Maintain secure backups to ensure operations continue even if data is compromised.
  • Data & Log Retention: Hold on to key data and logs for at least one year to help detect and investigate breaches.
  • Contractual Duties for Processors: Ensure third-party vendors (Data Processors) follow the same security rules through formal agreements.
  • Organizational & Technical Safeguards: Put systems and training in place like employee awareness programs, intrusion detection tools, and regular policy updates to make sure security isn’t just a checkbox but a working reality.

To further strengthen breach prevention, a certain class of Data Fiduciaries known as ‘Significant Data Fiduciaries’ under the DPDP Act are tasked with additional compliance obligations: they must conduct regular risk assessments to identify vulnerabilities within their data processing systems and infrastructures.

The penalty for failing to undertake reasonable security safeguards to prevent personal data breach is up to ₹250 Crores per instance of breach. This is the highest penalty envisaged in the DPDP Act.

Breach Notification Obligations

Immediate Notice: As soon as a data breach is identified, Data Fiduciaries are required to promptly inform both the Data Protection Board (DPB) and the impacted Data Principals . This notification must be prepared and delivered according to the procedures outlined in the Draft DPDP Rules. This notification should be sent data principals without delay via the user's registered account or other means such as email, SMS, or in-app alerts. It must include the following details:

  • Description of breach (nature, timing, and location)
  • Likely consequences for the affected Data Principal;
  • Mitigating measures undertaken by the Data Fiduciary;
  • Safety measures that the Data Principal can take; and
  • Contact details of the Data Protection Officer or other person responsible for replying to queries.

Notice to the Data Protection Board: The DPB must be notified without delay, with a preliminary description of the breach and its potential impact.

  • Broad facts and circumstances of the breach, circumstances and reasons leading to the breach;
  • Measures implemented or proposed to mitigate risks;
  • Findings on the person responsible for the breach;
  • Measures proposed or already undertaken to mitigate risks to the users;
  • Remedial measures to prevent recurrence; and
  • Status of intimations sent to affected users.

The penalty for failing to notify the user or the DPB about a personal data breach is up to ₹200 Crores per instance. This is the second-highest penalty envisaged under the DPDP Act.

Preventive Measures to Avoid Data Breaches

The old adage “prevention is better than cure” fits perfectly when it comes to handling personal data breaches under the DPDP Act. To effectively secure personal data, organizations must take a structured, all-round approach covering technology, administration, and awareness. Here's how Data Fiduciaries can strengthen their data protection measures in line with the Digital Personal Data Protection Act, 2023:

  • Data Minimization: Collect only the data that is absolutely necessary for your stated purposes. Less data means lower risk in case of a breach.
  • Storage Limitation: Retain personal data only for as long as needed. Once that period is over, delete it securely. For more guidance, refer to our industry-specific Data Retention Guide.
  • Encryption: Use strong encryption methods for both stored data and data in transit. This helps protect it even if other defenses are bypassed.
  • Security Protocols: Deploy strong security tools like SSL, firewalls, and intrusion detection systems to guard network traffic and prevent unauthorized access.
  • Data Governance Policies: Create clear rules for how data is managed—who can access it, how it's processed, and where it's stored. Regularly update these policies to reflect changing risks and regulations.
  • Risk Assessments & Audits: Regularly review your systems for vulnerabilities and conduct audits to ensure compliance with internal policies and external laws.
  • Third-Party Oversight: Ensure that any external vendors or processors follow the same data protection standards. Include them in your audits to maintain consistent compliance.
  • Training Programs: Train employees regularly on data protection practices, including spotting phishing attempts and other cyber threats.
  • Awareness Campaigns: Keep staff informed about evolving threats and new policies. Make data protection part of your organization's everyday culture.

Effective Breach Response Strategies

Through the Draft DPDP Rules, we can outline a structured approach for handling personal data breaches:

  • Act Quickly: As soon as a breach is detected, take immediate steps to contain it. Secure affected systems and shut down any unauthorized access.
  • Notify Promptly: Inform both the impacted users and the DPB without delay, following the rules for what to include and the 72-hour deadline for notification.
  • Learn and Improve: Keep records of the breach, how it was handled, and how users were informed. Use this information to improve your future response strategies.

How Ardent Privacy helps to overcome data breaches challenges under DPDP Act?

TurtleShield DBM (Data Breach Management) module helps organizations efficiently verify, assess, contain, manage and respond to data breaches including notifying affected individuals and regulatory bodies as per the legal requirements. TurtleShield DBM streamlines data breach management process, handles stakeholder management, accelerates breach response, enabling organizations to notify regulators and stakeholders within the required timeframe. Here's how it helps in overcoming these challenges:

Report a Breach in Time

Automated Data Breach Management with defined workflow: TurtleShield streamlines breach reporting by automating assessment and compliance workflows, ensuring organizations meet regulatory deadlines. It accelerates breach response, enabling organizations to notify regulators and stakeholders within the required timeframe.

Incident Response:

  • Helps the privacy team to assess high-risk data that may have been breached.
  • Helps organizations prioritize and contain the breach effectively.

Compliance & Regulatory Requirements

1) Pre-built Compliance Frameworks

  • Supports DPDPA and other global regulations.
  • Helps organizations track, document, and report breaches within required timelines.

2) Audit-ready Reports

  • Automatically generates breach impact reports for regulatory compliance.
  • Helps in incident documentation for audits and legal compliance.

Communication & Reputation Management

1) Predefined Breach Notification Templates

  • Provides regulatory-compliant breach notifications to inform stakeholders.
  • Ensures transparent and timely communication with customers and regulators.

2) Incident Timeline

  • Tracks the entire lifecycle of a breach, helping organizations improve future breach response strategies.

Data Breach Impact Assessment with Data Discovery

TurtleShield simplifies data breach notification by integrating automated data discovery with breach impact assessment. It quickly scans and identifies sensitive and regulated data affected by a breach, helping organizations determine who needs to be notified, ensuring compliance with laws like DPDP Act. By providing AI-driven risk assessment, and automated compliance reporting, TurtleShield eliminates manual guesswork, accelerates response times, and ensures that organizations meet notification deadlines accurately and efficiently.

Conclusion

Overall, a data breach management solution simplifies and streamlines data breach management processes, reducing the risk of non-compliance and improving data protection practices. It enables organizations to build and maintain a strong privacy and data breach framework while ensuring a positive privacy experience for everyone.