News portal Cobrapost alleges Paytm shared user data with political group

Digital payments firm Paytm is at the centre of a controversy over data privacy after a sting operation appeared to suggest that the Vijay Shekhar Sharma-led company had shared user data with a political organisation following orders from the Prime Minister's Office.

Investigative journalism portal Cobrapost put out a video on Friday in which Paytm's senior vice-president Ajay Shekhar Sharma is captured on camera saying that he provided user data of stone-pelters in Jammu and Kashmir to the Rashtriya Swayamsevak Sangh (RSS), the ideological parent of the ruling Bharatiya Janata Party (BJP).

#MediaOnSale Ajay Shekhar of paytm revealed that how they provided the data of their users to a political party, on the order of PMO. pic.twitter.com/fKZPQ2LDGZ

— Cobrapost (@cobrapost) May 25, 2018

TechCircle has not been able to independently verify the authenticity of the video.

Paytm’s privacy policy states that the company will not sell, share or rent users’ personal information to any third party.

In a statement late on Friday, A Paytm spokesperson said, “There is absolutely no truth in sensational headlines of a video doing rounds on social media...‪Our users’ data is 100% secure and has never been shared with anyone except various law enforcement agencies on request.”

Paytm, run by One97 Communications Ltd, is the second-biggest Indian tech unicorn, after online retailer Flipkart. In January, the company said it was valued around $10 billion after some current and former employees exercised their stock options.

Paytm counts Japan’s SoftBank Group Corp and China's Alibaba Group among its key investors. SoftBank had invested $1.4 billion (about Rs 9,000 crore) in Paytm last year. The company has rapidly expanded over the past couple of years. It also benefitted significantly from the government’s shock move in November 2016 to ban old high-value bank notes as part of efforts to discourage cash transactions and boost digital payments. 

The allegations comes in the backdrop of the recent controversy involving social networking giant Facebook, in which personal information of millions of users was leaked to political consultancy firm, Cambridge Analytica. That data was allegedly used to influence the outcome of the 2016 US presidential elections, raising questions over the handling of user information by tech companies. 

Facebook later revealed that the data breach also affected 5.62 lakh Indian users. After the scandal broke out, the Indian government had demanded a response from Cambridge Analytica on whether it was engaged to improperly harvest Facebook data on Indian citizens.

Tech companies worldwide are increasingly facing greater scrutiny related to data misuse. On Friday, the General Data Protection Regulation (GDPR) came into effect in the European Union. The regulation aims to give people greater control over how their personal data is used. In addition, companies with operations in EU countries will have to follow strict protocols on storing private data and sharing it with third parties.

Political links

The Cobrapost expose was part of a series of videos which purported to show media organisations willing to run a politically-biased campaign.

In Paytm's case, Ajay Shekhar Sharma was seen speaking to Cobrapost's Pushp Sharma, who met the senior Paytm executive on the pretext of wanting to sell religious items on the platform.

The journalist is also shown meeting Paytm company vice-president Sudhanshu Gupta, who acknowledges his political affiliations with the RSS and also talks about how the company purportedly propagates certain types of 'Hindutva content' through its app.

*This article has been updated to add a comment from a Paytm spokesperson.