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CS Professional · Artificial Intelligence, Data Analytics and Cyber Security - Laws and Practice · Data Analytics

An e-commerce firm applies predictive analytics to customer browsing and purchase data, creating individual profiles to target advertisements. Which compliance observation is most accurate under Indian law?

The firm must have a lawful basis, typically consent, because profiling customers is processing of personal data under the Digital Personal Data Protection Act, 2023, and use must match the purpose collected. Analytics is no exemption, though identifiable data is not wholly prohibited.

  1. ANo consent is needed because the data is used only for analytics
  2. BThe profiling involves processing of personal data, so the firm must have a lawful basis such as consent and respect the purpose for which the data was collectedCorrect
  3. COnly anonymised data may ever be used in predictive analytics, so profiles are always prohibited
  4. DThe Information Technology Act alone applies and the digital personal data law has no relevance

Explanation

Individual profiling is processing of personal data, so the Digital Personal Data Protection Act, 2023 requires a lawful ground such as consent and use for the stated purpose. Analytics use is not an exemption. Option C overstates, since lawful processing of identifiable data is permitted, and option D wrongly ignores the DPDP Act.

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