Mohd Rameez Raza, a law student at Integral University in Lucknow, India and Raj Shekhar, a law student from National University of Study and Research in Law, Ranchi, India, discuss whether the Indian ban on Chinese-developed apps violates WTO rules...
The Indian Government took the global media by storm when it announced a ban on 59 Chinese apps in India to counter the threat posed by these applications to the country’s “sovereignty and security”. The ban has been imposed under Section 69A of the Information Technology Act, and justifying its move the government cited the reasons of apps engaging in activities which were “prejudicial to sovereignty and integrity of India, defense of India, the security of the state and public order.” The Chinese government sees such a move as a direct blow on its Digital Silk Route ambitions, as India’s move may be inspirational for other countries which may follow the same route, owing to the discriminatory practices of China towards companies from foreign countries. The Chinese Foreign Ministry has through its press release alleged India for introducing measures, which were selectively and discriminatorily aimed at certain Chinese apps on ambiguous and far-fetched grounds, which run against fair and transparent procedure requirements, abuses national security exceptions, and suspects of violating the WTO rules.
World Trade Organization (WTO) is the chief body that looks into discriminatory trade practices and works towards the dispute-settlement mechanism which operates through Panels and the Appellate Bodies. It was formed by Marrakesh Agreement which succeeded the erstwhile General Agreement on Trade and Tariffs, 1947 (GATS). As far as the obligations are concerned, every member state is mandated to maintain anti-discriminatory policies and keep their markets open access based markets. Services under GATS are defined as “any service in any sector except services supplied in the exercise of governmental authority” and thus incorporate within its definition all kinds of services as long as they are commercial in nature. However, the question that is often raised is – Are Internet-based services covered by GATS?
When we talk of e-commerce, then such activities are indeed under the GATS agreement as they require physical delivery. But when it comes to purely internet-based services like Facebook and Search Engines, they were generally seen as exceptions until the US–Gambling dispute which applied the provisions of the GATS to online gambling and thus cleared the classification of online services under GATS. There are certain texts which the drafters incorporated within the draft like ‘online information retrieval’ or ‘data processing services’ in the early 1990s to help in technological incorporations, and these are the points which have come to the rescue of the world. As per the Article 31 of the Vienna Convention on the Law of treaties (VCLT), interpretation should be based on a textual understanding aided by some supplemental materials, but nothing has been said about words whose meaning change owing to the changing times. But in cases such as Shrimp-Turtle dispute and US-Gambling dispute, the wider interpretations clearly show that internet-based services do have the same status as ordinary services.
When a WTO member has made National Treatment (NT) and market access commitments in a certain sector which happens to be relevant to a certain internet-based service that the member state has censored through a ban. As long as such restrictions have the same impact on all the domestic and foreign states, there is no case of NT obligation breach. However, as in the present case, only China looks to have been disadvantaged, it is pressing for charges of discriminatory tactics. As per article XVI of the GATS, member states are prohibited from imposing quantitative restrictions such as limits on the ‘number of service suppliers’, the ‘total value of service transactions’, or ‘limits on the percentage of foreign ownership’ in areas where they have undertaken such commitments. In this case, the present ban can be seen as a ‘quota restriction’ set at the limit of zero for Chinese origin apps and can be concluded that censorship constitutes a quantitative restriction imposed by India on Chinese App developers.
But would that make India’s move look like a contradiction to the obligations? The answer is – No because just like every other obligation, there exist certain exceptions. The GATS obligations of member states may sometimes conflict with the national defense and security interests and hence under Article XXI provides a list of Security exceptions to the obligations that are imposed under GATS. There are provisions which clearly state that a state part can do away with its obligations under the agreement if it finds such an act of abstaining important and essential for its national security interests. When we interpret this provision we can clearly say that India’s move has been in no way violative, as it is clearly protected as an exception.
China by raising questions on India’s ban has made an open mockery of itself, for it is the world’s largest censorship regime. Also, the present border tensions that exist between India and China, are more than enough for the government of India to be skeptical about the nature of data that Chinese apps have been transferring. China has been known to use its companies to infiltrate the user data in foreign jurisdictions, the Indian government can clearly consider it as a threat to its national defense strategy, as there exist wide possibilities that this data from the Indian Users can be used by the Chinese government to mine strategically important data. TikTok, UC Browser, etc. are the most common apps found on Indian user smartphones and even on phones of military personnel. Not only can these apps and the data collected by them help in pinpointing certain officials, but they can also be used to map the overall defense formations.
Communication is the most important avenue when it comes to effective troop deployment. China in the past, such as the Google Case in Beijing, has been notoriously involved in large scale cyber-attacks and this can indeed be yet another occasion of such an occurrence. Even the superpowers like the USA, the most famous Huawei Case of USA, United Kingdom, and many European nations have time and again raised questions on the motives of China and its cyberattacks, which are allegedly government-sponsored. These attacks can never be taken lightly because they have the potential to expose the very security of a nation. Every nation has the freedom to take steps to ensure the security of its sovereignty and its people. In the past, we have seen how the USA has severed its connections to tech giants like Huawei, who were allegedly involved in transferring US Citizen data to the Chinese Government. In a country like China where every company is under the total control of the government, the data collected by them cannot be deemed to be safe from unauthorized government usage.
Like every other International Treaty, even GATS acknowledges the importance of National Security and thus leaves scope for exceptions. India by banning such apps has in no way violated any WTO rules, contrary to the Chinese Stance, because it’s beyond reasonable doubts that China can indeed use these apps to surveillance the Indian Citizens and collect critical security-based data. China’s statements can be seen as mere retaliation to the economic pressure it has been subdued into, as these apps heavily relied on Indian markets and were a great source of income for China. Therefore, in no way does India’s move stands unjustified and on a closer analysis of the Chinese strategy of cyber warfare, the move could be seen as a nation’s strong stance towards protecting its security, integrity, and sovereignty from foreign transgression, and such a move to ban Chinese apps stands firm and totally justified even at the face of stringent WTO Rules.
Mohd Rameez Raza is a law student at Integral University, Lucknow, India, and an experienced Legal Researcher and Policy Interventionist, with a keen eye for detail. Areas of interest include International Law, Human Rights Law, and Indian Constitutional Law.
Raj Shekhar is a law student at India National University of Study and Research in Law, Ranchi, India. Being an avid reader, Shekhar likes to read and write about new developments in the Legal Field. Areas of interest include Cyber Laws, Indian Constitutional Law, and Intellectual Property Rights Law.
Suggested citation: Mohd Rameez Raza and Raj Shekhar, Indian Ban on Chinese Apps: Does the Move Contradict WTO Rules?, JURIST – Student Commentary, July 20, 2020, https://www.jurist.org/commentary/2020/07/raza-shekhar-india-wto-apps/.
This article was prepared for publication by Brianna Bell, a JURIST Staff Editor. Please direct any questions or comments to her at email@example.com.
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