Government Warns Ed-Tech Companies Against Unfair Trade Practices

The government has warned ed-tech companies against unfair trade practices in India. In a meeting with industry body India Edtech Consortium (IEC), Consumer Affairs Secretary said that stringent guidelines would need to be worked out for ensuring transparency if self regulation does not curb the unfair trade practices in the sector. The meeting was attended by IEC member companies including Byju's, upGrad, Unacademy, Vedantu, and WhiteHat Jr, among others. Ed-tech platforms gained massive attention during the initial phase of the COVID-19 pandemic as schools and colleges were shut down due to lockdowns. But the growing adoption later pointed out the gaps that need to be filled.

On Friday, Consumer Affairs Department Secretary Rohit Kumar Singh discussed issues related to unfair trade practices and misleading advertisements impacting the ed-tech sector. Singh said that "certain advertisements and practices do not seem to conform to prevalent guidelines and existing regulations."

In addition to pointing out the issues with advertisements and trade practices, Singh discussed ways to better manage consumer interests across India's ed-tech ecosystem.

The meeting also raised concerns of increasing fake reviews. Further, the secretary advised IEC to form a joint working group with relevant stakeholders to create standard operating procedures to "continue with positive efforts to serve the ecosystem."

Held in New Delhi, the meeting was attended by representatives of the Internet and Mobile Association of India (IAMAI), along with IEC member companies including Byju's, upGrad, Unacademy, Vedantu, Great Learning, WhiteHat Jr, and Sunstone.

Earlier this week, a report released by the Advertising Standards Council of India (ASCI) highlighted that the advertisements coming from the education sector — primarily related to ed-tech companies — emerged as the largest violator of the advertising code for the period between April 2021–March 2022.

The education ministry in December also issued an advisory to caution people against ed-tech companies in the country. The ministry had urged consumers to avoid auto-payments for ed-tech platform subscriptions and advised them to read the terms and conditions before acknowledging any acceptance of learning software or device.

That advisory came after some reports suggested a lucrative behaviour of major ed-tech companies including Byju's in which parents and students were allegedly shown to be targeted to pay for online content that they couldn't even afford.

As a result of the initial outage, the IAMAI in January formed the IEC as a unified group of leading ed-tech companies to "safeguard consumer interest" and self-regulate by using a common 'Code of Conduct' as well as establishing a two-tier grievance redressal mechanism.