When Data Privacy Turned into a Startup's Worst Nightmare

Twitter Inc. recently filed a lawsuit against the Indian government for what it considers "arbitrary" and "disproportionate" orders to remove content and block accounts. Last year, Meta Platforms Inc.'s WhatsApp filed a lawsuit in New Delhi against India's new internet rules requiring chat tracing. Such a requirement, the messaging service claims, will force it to break its promise of end-to-end encryption, putting journalists and political activists at risk.

Aside from those high-profile cases, the deteriorating operational environment for ordinary digital businesses in India is a bigger concern. Their rapid growth is frequently lauded, but the minefields they face on a daily basis are underappreciated.

Razorpay, an eight-year-old Bengaluru startup that acts as a payment gateway, changed that last week. The company unintentionally sparked outrage when it was revealed that it had been forced to provide customer data in a police investigation against Alt News.

Mohammed Zubair, one of Alt News' two co-founders, was arrested on June 27 for allegedly infringing on religious sentiments. The original complaint was about a tweet he sent more than four years ago referencing an old Bollywood film. However, the Delhi Police has since broadened the charges to include alleged violations of a law that prohibits non-profits from accessing foreign funds without first registering with the government. A public prosecutor told the magistrate at the techie-turned-bail journalist's hearing on July 2 that Alt News received money "via Razorpay from Pakistan, Syria, Australia, Singapore, and the UAE, all of which require further investigation." Zubair's lawyer has denied all allegations.