Economic Analysis of Verifiable Parental Consent Mechanisms: Evaluating Impact on
Consumers and Data Fiduciaries

Background and Context

In August 2023, the Indian government enacted the Digital Personal Data Protection Act, 2023, to safeguard individuals’ digital personal data. The Section 9 of the Act requires ‘verifiable consent’ from a lawful guardian for processing a child’s personal data, necessitating data fiduciaries to verify the child’s age, confirm the guardian relationship, and document the consent. This requirement could result in children repeatedly seeking parental consent to access various services, impacting service providers, especially smaller companies, with increased customer acquisition costs and operational burdens. This regulatory burden might stifle innovation in developing children’s products and services as providers may hesitate to invest in new ventures.

For consumers, the process can become cumbersome, overburdening both parents and children, potentially hindering their engagement with digital services. The increased compliance costs for fiduciaries might also be passed on to consumers, directly or indirectly. Therefore, it would be prudent to evaluate and compare the economic impact of various parental consent procedures in order to offer a thorough grasp of their operational and financial implications.

Various mechanisms exist for obtaining verifiable parental consent (VPC), including those managed by digital service providers, intermediaries, consent managers, and Indian innovations like DigiLocker and Aadhar. This project will compare these mechanisms’ costs, including implementation, operational, compliance, and scalability costs

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Project Brief