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

Quantum Insights Pvt Ltd, a body corporate, holds sensitive personal data in its own servers for analytics. It neglects reasonable security practices, and a breach causes wrongful loss to a customer. Which provision of the IT Act, 2000 most directly applies?

Section 43A of the IT Act, 2000 applies. A body corporate that handles sensitive personal data and negligently fails to maintain reasonable security practices, causing wrongful loss or gain to someone, must pay compensation to the affected person. The other sections deal with image privacy, nodal agencies or good-faith protection.

  1. ASection 66E, imprisonment for capturing images of a private area
  2. BSection 70A, designation of a national nodal agency
  3. CSection 43A, liability to pay compensation for failure to protect dataCorrect
  4. DSection 84, protection of action taken in good faith

Explanation

Section 43A makes a body corporate handling sensitive personal data liable to pay damages by way of compensation if negligent in maintaining reasonable security practices and thereby causing wrongful loss or gain. Section 66E concerns images of private areas, so it does not fit.

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