DPDP Enforcement Begins: Penalties up to ₹250 cr breach put entire digital ecosystem on high alert
Final DPDP Rules spark alarm across agencies, publishers, analytics firms as stringent consent, retention, and breach norms take effect.
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Ad networks, media agencies, publishers, analytics firms, and every business processing personal data now face India’s strongest-ever financial penalties as the Digital Personal Data Protection (DPDP) Act, 2023 moves into its enforcement phase.
The law empowers the Data Protection Board to impose penalties up to ₹250 crore for a single serious violation, such as failing to implement reasonable security safeguards to prevent a data breach. Additionally, companies may face penalties up to ₹200 crore for failing to notify the Board and affected users of a breach, alongside substantial fines for consent violations, unlawful retention, or failing to honour data principal rights.
For the advertising and ad-tech ecosystem, which relies heavily on behavioural tracking, profiling, and targeted delivery, this marks an existential shift. But the compliance burden is equally heavy for platforms, AI builders, enterprise tech stacks, MSMEs, and startups.
And while the rules are staggered over 12–18 months, experts say the countdown has already begun.
Storyboard18 earlier reported that the mainstream advertising and ad-tech agencies are already overhauling data systems, consent frameworks, and targeting models to balance personalization with privacy, and have witnessed 15% spike in compliance expenditure
Ad agencies lose targeted ads- not just reach, but ROI
According to Meghna Bal, Director, Esya Centre, the biggest immediate casualty will be children’s advertising. With strict parental consent and purpose limitations now in force, ad agencies may shift kids-focused campaigns back to TV, but even that route is collapsing.
“Cord cutting makes TV an unreliable long-term avenue. TRAI’s regulations have made survival difficult for niche channels like kids entertainment, further narrowing inventory for children’s ads,” she said.
Theatres screening kids’ films offer another route, but footfalls are shrinking. Meanwhile, influencer-led advertising may rise, but with its own risks.
“Because influencer follower authenticity is opaque, advertisers will lose out. MSMEs, heavily dependent on targeted ads for customer acquisition, will be hit the hardest,” Bal added.
India moves from signalling to enforcement
The notification of the final rules and the constitution of the Data Protection Board signals that India has moved from a decade of policy signalling to an enforcement-ready privacy regime, said Shreya Suri, Partner, CMS IndusLaw.
But despite months of industry feedback, most of the heavy obligations remain intact:
- Verifiable parental consent
- Cross-border transfer restrictions
- Tight breach-notification timelines
- Consent-manager ecosystem build-out
A major gap remains: the government still hasn’t notified which companies will be classified as Significant Data Fiduciaries (SDFs) - entities that will face stricter obligations including audits, DPIAs, algorithmic accountability and potential data localisation.
“Without SDF classification, companies don’t know whether they must prepare for heightened obligations. This uncertainty compresses the compliance runway, despite the regulator already being in place,” Suri said.
‘Data mapping will be the single biggest operational hurdle’
Akshayy S. Nanda, Partner, Saraf & Partners, said the most disruptive shift is that consent must be strictly limited to the data necessary for a specific purpose.
“This fundamentally challenges the historical practice of broad data collection for future use. Organisations will have to redesign products and business models around data minimisation,” he said.
He highlighted three major overhaul areas:
1. Data Architecture Redesign Segregating personal vs non-personal data, automated deletion pipelines, consent-tagged storage, restructured data flows.
2. Consent Infrastructure Dedicated CMPs, granular consent by purpose, one-click withdrawal, re-consent mechanisms, audit logs.
3. Vendor & Processor Reconfiguration Renegotiating DPAs, reviewing sub-processors, security audits, mapping all external data flows.
Legacy systems, shadow IT, missing documentation and weak governance culture will make this exponentially harder.
“Organisations face a choice: treat DPDP compliance as a transformation, or attempt incremental fixes. Those taking incremental routes will likely face enforcement action and disruption by May 2027,” Nanda warned.
For businesses, the next 12–18 months will define whether India’s privacy law succeeds.
A regulator-driven opportunity to institutionalise ‘Privacy by Design’
Murali Rao, Partner & Cybersecurity Leader, EY India, said the rules create a clear roadmap for how Indian enterprises must collect, process and govern personal data.
But this also means compliance costs will rise. Enterprises must immediately prioritise:
- Data discovery and mapping
- Consent workflows
- Retention and deletion automation
- Breach-response mechanisms
- Technology-led governance tools
“If used well, this transition can convert privacy from a risk to a competitive advantage,” Rao said.
Structural shifts and operational pain points
According to Dhruv Garg, IGAP, the rules mark the point where India’s privacy law becomes operational rather than aspirational.
The one-year mandatory data retention rule will improve auditability but also extend the digital footprint of every citizen. Smaller firms will find the 12–18 month compliance window particularly tough.
Parental consent and children’s data: clarity, but also heavy costs
Sourya Banerjee, Associate Director, Public Policy Communications, Jajabor Brand Consultancy, said exemptions for healthcare, safety and government-benefit services are positive but practical challenges remain.
“Parental consent still increases transaction costs for companies targeting minors — from edtech to gaming. First-generation digital learners whose parents cannot navigate online systems are especially at risk,” he said.
AI development may also face friction: explicit consent requirements and withdrawal rights complicate model training and unlearning.
Aparajita Bharti, The Quantum Hub, said the rules add nuance and flexibility in children’s data use, including exemptions for surfacing age-appropriate content and location tracking.
But scaling verifiable parental consent through India’s digital infrastructure remains untested.
Tech firms view the rules as a long-awaited step toward global-standard data governance.
“This strengthens trust and provides a clear path for privacy-first growth,” said Sujit Patel, CEO, SCS Tech India.
Kazim Rizvi, The Dialogue, added that the rules bring much-needed clarity on retention, purpose limitation, and breach protocols.
Pushpendra Bharambe, Partner, Nangia & Co LLP, underlined that obligations are phased:
- Immediate: privacy notices, grievance officer, retention controls, accuracy checks
- One year: consent-manager registration, rights interfaces, breach-format alignment
- 18 months: full compliance, audits, DPIAs, governance frameworks
But localisation mandates, strict verification, and high compliance costs could burden smaller players.
India’s DPDP era has begun , and for the advertising, ad-tech and analytics ecosystem, the stakes are far higher than before. With ₹250 crore penalties, shrinking advertising avenues for children, operationally complex consent requirements, and huge data mapping overhauls, the industry now enters an inflection point.
