Banning of 59 Smartphone Apps by India and the Laws of the WTO (GATS)

Introduction

 

Recently, the Government of India decided to block 59 Smartphone Apps. According to the Government of India, the same were blocked “... in view of information available they are engaged in activities which is prejudicial to sovereignty and integrity of India, defence of India, security of state and public order.”

 

In the Press Notification issued in this regard, it has been further stated that: -

“At the same time, there have been raging concerns on aspects relating to data security and safeguarding the privacy of 130 crore Indians. It has been noted recently that such concerns also pose a threat to sovereignty and security of our country. The Ministry of Information Technology has received many complaints from various sources including several reports about misuse of some mobile apps available on Android and iOS platforms for stealing and surreptitiously transmitting users’ data in an unauthorized manner to servers which have locations outside India. The compilation of these data, its mining and proling by elements hostile to national security and defence of India, which ultimately impinges upon the sovereignty and integrity of India, is a matter of very deep and immediate concern which requires emergency measures.

.......

On the basis of these and upon receiving of recent credible inputs that such Apps pose threat to sovereignty and integrity of India, the Government of India has decided to disallow the usage of certain Apps, used in both mobile and non-mobile Internet enabled devices. These apps are listed in the attached appendix.”

 

Thus, according to the Government of India, since such Apps pose threat to the sovereignty, security and integrity of India, it has decided to disallow their usage. Interestingly, almost all of the Apps seem to have Chinese Origins. It is pertinent to note that Smartphone Apps provide variety of “services” to their respective users and many of them also involve trade and commerce.

 

GATS of WTO

 

GATS (General Agreement on Trade in Services) is basically an international agreement that governs how WTO members may regulate trade in services. The term ‘services’ has nowhere been defined under GATS. The only reference has been made under Article I of GATS which states that “‘services’ includes any service in any sector except services supplied in the exercise of governmental authority.”

 

There are four modes of supply under GATS: -

 

1.         Cross-Border Supply

2.         Consumption Abroad

3.         Commercial Presence

4.         Movement of Natural Persons

 

The present position is that Internet Based Services fall under Mode No. 1 i.e. Cross-Border Supply of Services. Further, GATS also provides for “Market Access” Commitments and Article XVI of the GATS states that “Each Member shall accord services and service suppliers of any other Member treatment no less favourable than that provided for under the terms, limitations and conditions agreed and specified in its Schedule.”

 

Schedule of Specific Commitments and WTO Jurisprudence

 

With respect to GATS, there is a Schedule of Specific Commitments by India that includes variety of services such as Online Information, Data Processing, Audiovisual, Software Implementation, Financial Services etc. These are broad head of services for which the country provides its Market Access, National Treatment and other Commitments. Thus, the Smartphone Apps depending upon the kind of services they are offering may or may not fall within one of these categories of services.

 

Article XIV and Article XIV bis of the GATS provides for General and Security Exceptions respectively. Thus, a country may restrict certain services if the same is against public morals, public order, affects safety and security of the country etc. In the celebrated case of United States — Measures Affecting the Cross-Border Supply of Gambling and Betting Services (DS-285), the WTO Appellate Body observed that the prohibitions/blockage embodied in such measures need to be applied to both foreign and domestic service suppliers of the services in question in order to satisfy the respective requirements of the Schedule of Commitments. Further, in the case of China– Measures Affecting Trading Rights and Distribution Services for Certain Publications and Audiovisual Entertainment Products (DS-363), it was also observed that it is pertinent to be demonstrated by the country imposing restriction/blockage/prohibition on services that such measure was “necessary” to achieve the object sought to be achieved. This is also called the “Necessity Test.”

 

Concluding Observations

 

In my humble opinion, according to the Government of India, the decision to block 59 Smartphone Apps has been taken in the interests of the security, sovereignty and integrity of the country. Such exceptions definitely exist in the GATS of the WTO. However, if such a dispute comes up before the WTO, it remains to be seen how the prohibition measures taken by India will be interpreted by the DSU (Dispute Settlement Understanding).