India’s edtech sector needs stronger laws

Edtech is a revolution in the education sector, but the consumer-end problems need to be quickly and effectively addressed

The global edtech market was expected to be $404 billion by 2025. But it has seen big players like Lido Learning, Udayy, Superlearn, and Crejo.fun winding up, while others such as Byju’s, and Vedantu courting controversies. Tracxn data indicates the funding in the Indian edtech startup ecosystem dipping from $4.1 billion in 2021 to $2.5 billion in 2022.

According to ConsumerComplaints.in, a grievance forum, 3,914 complaints were raised against Byju’s as of 2023. It has been summoned by the National Commission for Protection of Child Rights (NCPCR), consumer forums and other governing bodies to provide an explanation in the matter.

The concern is that many Edtech platforms often engage in mis-selling, harassment of parents and students, deceptive and misleading advertising and marketing, aggressive carrots or sticks sales strategy with no real benefit for the end consumer, predatory lending, personal data breach, governance issues, conflicts within the organisation, and employer-employee disputes.

It is thus necessary to shed light on the laws governing the edtech space, and relook at whether the current regime has the teeth to tackle this menace.

Paper Tiger Laws

Edtech is considered as ecommerce and laws such as the Consumer Protection Act, the Consumer Protection (ecommerce) rules, the Information Technology Act, and the IT rules shall apply. The governing entities include consumer courts, the Department of Administrative Reforms and Public Grievances, and the Advertising Standards Council of India (ASCI). Of these, the ASCI is a self-regulating industry body. Time and again, the government reiterated these safeguards, and has issued cautionary public advisories.

In 2021and in 2022, the Ministry of Education took note of the rising complaints against the predatory marketing and advertising techniques used by edtech companies. It announced that it would formulate laws to regulate this market. In response, the Internet & Mobile Association of India (IAMAI) constituted a self-regulatory body called the Indian Edtech Consortium (IEC). Sadly, all these remain advisory, holding mere persuasive value.

To tackle the menace of misleading advertisements, the ASCI announced guidelines for advertisements by educational institutions, programmes and platforms in March. The guidelines prescribe harmless, truthful, and honest advertisements backed by substantiation. It noted that commercials must not show average or low scoring students as despondent, and unworthy. It gives priority to student health and refrains advertisements from showing students forsaking sleep or food for studies or instilling a false feeling of urgency or the fear of losing out.

The ASCI’s scope and powers are limited to looking into predatory, misleading, and fraudulent claims of companies in their marketing and advertising campaigns. These paper tiger laws lack proper enforcement and, thus, are not deterrent enough for larger edtech entities.

While the menace of data protection and privacy in the Indian jurisdiction has been kept under control owing to rapid digital rights activism and awareness, redress of harassment against consumers and employees remains a complicated proposition with ambiguity of overlapping laws. It is questionable as to how much the self-regulating bodies achieve in monitoring and enforcement. The ASCI’s own research report of June 2022 revealed that complaints against edtech companies accounted for one-third of all complaints of misleading advertisements.

In global context, the United States and the European Union have some relatively lucid regulations in place. The US Federal Trade Commission Bureau and the European Commission closely monitor businesses and crack down heavily on misconduct and malpractice. Similarly, there is a need for stricter norms and a designated regulator to monitor the industry. Alternatively, India’s ministry of education can be conferred the power to regulate the self-regulatory bodies in a similar model as proposed in the recent online gaming laws.

Thus, the concerns of Indian consumers are broadly two pronged: one, protection against harassment, and two, predatory advertising and sales. All the guidelines and laws are scattered which makes it tedious for a lay consumer to seek redress. The profit accruing from misconduct and wrongdoings seem to be more tempting as against the cost of the penalty.

The authorities must regulate the nature and standing of the claims made to ensure that customers are not misled. Additionally, mandatory disclosures regarding financial arrangements, guarantees, refund, and cancellation policies must be mandated. On the other hand, legislative action needs to be operationalised as soon as possible to fill the legal vacuum in India’s legal protection landscape.

Education technology has without doubt emerged as a watershed fix in ensuring the right to accessible, affordable, and quality education — but the need for a one-stop codified solution has become evident.

(Trisha Shreyashi and Renu Gupta are advocates.)

Disclaimer: The views expressed above are the author's own. They do not necessarily reflect the views of DH.