The Rise Of Edtech: Why We Need To Regulate?

Sanchit Gupta & Vaibavi SG

23 Aug 2022 12:03 PM GMT

  • The Rise Of Edtech: Why We Need To Regulate?

    Given the circumstances of virtuality after COVID-19, one industry that has seen considerable growth and investment has been that of the EdTech companies. India serves a great market for these companies and start-ups, according to the data provided by IBEF, "the Indian EdTech industry was valued at US$ 750 million in 2020 and is expected to reach US$ 4 billion by 2025 at a CAGR...

    Given the circumstances of virtuality after COVID-19, one industry that has seen considerable growth and investment has been that of the EdTech companies. India serves a great market for these companies and start-ups, according to the data provided by IBEF, "the Indian EdTech industry was valued at US$ 750 million in 2020 and is expected to reach US$ 4 billion by 2025 at a CAGR of 39.77%".

    Although they have been existing for quite a while now, the Covid pandemic highlighted the need for online learning more now than ever, and gave a huge boost to this industry. The huge potential of digital learning platforms is not lost on investors, entrepreneurs, and the government in India, as affordable smartphones and low-cost internet services are widely available. All these factors would make one think that these companies must be encouraged by all means. This industry serves as the only hope in the trying times of pandemic, in fact their rise is important to ensure widespread accessibility and reach of e-learning, combined with the operational autonomy they require to grow. However, there also exists a need for recognising the problems that are hatched by the rise of these companies. Their advantages in no way, lower the burden of government to ensure the welfare of users, as this industry is supporting a significant aspect of education in such unprecedented times.

    Recently, the education ministry hinted towards an EdTech regulation policy being on the anvil. Against this regulatory need and various other apprehensions, the authors of the article deem it necessary to analyse the different legal aspects of the issue along with advocating for the need for such regulation.

    What Is Ed-Tech?

    "EdTech (a combination of "education" and "technology") refers to hardware and software designed to enhance teacher-led learning in classrooms and improve students' education outcomes."[2] The institutions registered as a company, which specialise in providing edtech services can be termed as EdTech companies. Real life examples can include Byju's, and many more.

    Why The Need?

    The education sector in India has been regulated by the Government. But the problem is with the unregulated places which provide for ancillary services like coaching centres, entrance exam training, complementary learning, mock testing etc. The online learning platforms or EdTech companies fall under the same category and practically have no regulations governing them.

    These ed-tech companies are no longer within the boundaries of conventional coaching institutes, they have moved way beyond this model not only in the teaching methodology but also in the means, practices and culture adopted by them. The governments both in the Centre and in states have brought in various schemes and guidelines to encourage safe and ethical growth of these online sources of learning. It is to be appreciated that states have brought up various legislations like, the Manipur Coaching Institute (Control and Regulation) Act, 2017, Uttar Pradesh Regulation of Coaching Act, 2002, etc. However, these companies have found pathways to circumvent these regulations and thus have been pulled to courts for a myriad of reasons, cheating being the prominent one. The frameworks are in place, but they are not enough to include the new progressive aspects of the ed tech industry.

    These Edtech companies are majorly privately owned, focusing on profit maximisation to make their investors smile. There are regulations which provide for standard qualifications for teachers but they don't apply to these companies which puts the students completely behind the blinds about the ability of their teachers. False profiling of teachers as well as quality of the content of these companies remain to be dubious. Regulations and stricter penalties would force these companies to work upon providing quality, helpful content and ensure credibility of their teachers.

    Then there are false claims and alluring ads put up by such companies, doping and exploiting parents' desire to make their children stand out in this competitive world. Does an MBA guarantee a job abroad? But seeing those ads, one can easily get lured. Such is the ability of these companies to exploit the innocent ambitions of the youth. Customers of such EdTech companies have complaint about their "aggressive mis-selling" and their "unrealistic claims" in their strategies to gather more users. These complaints were seriously taken up by the central government and a meeting was called with India Edtech Consortium (IEC) which is a self-regulating body running under the shed of Internet And Mobile Association Of India (IAMAI). In the meeting the government fiercely warned Edtech companies and startups like Byju's , Vedantu, Unacadmey for unfair trade practices.

    Loans are generally feared by the middle class, but when it comes to the education of their ward they steer away from the fear because they hope that the returns will be much higher than the cost and burden of loans. Such companies, under the garb of being a benefactor, push them to take their courses on loans with intricate terms and conditions for refunds. These businesses frequently have broad discretion to change the privacy policy with or without notifying the user and frequently exercise broad powers regarding revision, modification, and cessation of the said policy. Additionally, they retain the ability to tell the user only if there are material modifications to how these platforms handle users' personally identifiable information on an individual basis. They also have the choice of how to convey the amendment (as well as how it will be done).

    The District Consumer Disputes Redressal Forum was approached with a complaint of inadequacy in service against an EdTech company in "Joginder Singh Saini v. Byju's Think & Learn Pvt Ltd".[3] The complainant had acquired the respondent's services for Rs. 3000/- and had to supply information about his credit card so that the remainder of the course fee could be debited in instalments. The complaint did not appreciate the company's teaching technique and repeatedly requested that the service be terminated. The company, on the other hand, turned a blind eye and deducted money from the applicant's account on a regular basis. The complainant's claims of deficiency in service and harassment were upheld by the consumer forum, and as the opposing party did not appear in court, the forum ordered a refund of the amount deducted as well as indemnification of the applicant's legal expenses.

    Likewise, the consumer in "Anurag v. Byju's The Learning App"[4], was given the option to cancel the course after a trial period. When the customer expressed his desire to discontinue the company's services owing to his inability to pay the instalments and informed this, the opposing party ignored him and proceeded to deduct payments. The court noted a defect in service and unfair commercial practices, and ordered a refund as well as the payment of litigation costs.

    Ed tech firms also pose a great threat to the privacy of students. Students, representing a significant portion of their consumer base, are generally unaware of the privacy issue and may provide consent to various privacy policies of these firms. While we are worrying about the privacy policies of WhatsApp, Facebook, why are we overlooking this aspect in the arena of online education? They are maintaining databases of students and profiling them which may include their phone numbers, IP addresses, bank details which are equally susceptible to cyber-attacks. Young children because of their age are more easily targeted subjects.

    The Current Legal Framework

    The issue of Ed Tech companies can be looked through from different legal points. However, this mainly comes under the bounds of Consumer protection law. Earlier, e-commerce was left out of the purview of the act, but with the passing of the Consumer Protection Act, 2019, e-commerce entities were brought within the fold. The question also remained as to whether education could be termed as a "service", whether a student could be called a consumer and whether claims against educational institutions could be brought under this. In a reference, the National Consumer Disputes Redressal Commission stated that educational institutions are not covered by the Consumer Protection Act; however, coaching institutes provide a "service" that must be distinguished. Interestingly, the E-Commerce rule's (2020) scope and applicability are broad enough to embrace any goods and services purchased or sold over a digital or electronic network, including digital items and all e-commerce platforms, including marketplace and inventory models. Here too, complexities arise. Questions persist about how platforms that operate on a [5]freemium model or provide a mix of free and paid services should be treated. It will have to determine whether the Rules will apply to all services provided or solely to those that charge a fee. The question of what rules will be directly applicable to EdTech enterprises remains unanswered.

    Currently India does not have a specific data protection act but the bill is in the pipeline and may see the light in the near future. The data protection bill significantly reassures that the government is aware of challenges this data collection can pose. Sec 16(2) Of the Personal Data Protection Bill provides for the consent to be taken by the parent in case of collection of data of minors. "According to Section 7 of the Bill, the data fiduciary is under the obligation to notify the data principal at the time of collection or processing of personal data."[6] Furthermore, the PDP Bill's Chapter II makes data fiduciaries more accountable for how they handle users' data (Section 10). It requires the data principal's knowledge and approval before the data fiduciary processes any data (Section 11). Due to the modifications made to the privacy policy, the fiduciary not for long can benefit from the extensive powers. It has the potential to clearly delineate the permissible from the impermissible, clarifying the scope of our fundamental right to privacy but has to be passed by the legislature as soon as possible.

    When a certain process or activity is standardised, its chances to drive towards fault lines reduces. The government should issue standard guidelines which such ed tech mandatorily have to abide by. This will also help such companies gain more consumer trust and therefore will be helpful for their own growth as well as for the students suffering serious gaps in their learning. ISO provides standardisation to various systems which can be adopted by such entities.

    When a consumer does not like a service, he should have the option to move out, this represents their right to free will. Many Ed tech companies do have the facility for consumers to move out but they hide this in complicated processes and intricate conditions. The refund process should be just a click away with no questions asked. Although these companies do somewhat come under the purview of consumer protection act, special legislation concerning these companies should be introduced for their governance and to increase their accountability.

    Data protection and privacy is indispensable in digital India. Consequently, a data protection act and a specific legislation for the EdTech industry should be introduced with utmost priority bringing such companies under its umbrella. These would go a long way in ensuring a hustle free digital learning for the children of the nation, specifically in times such as these.

    Views are personal.

    1 India to become the EdTech Capital of the world,


    3 Consumer Complaint No. 207 of 2019.

    4 Consumer Complaint No. 146 of 2019.

    5 Personal Data Protection Bill, section 7.

    6 Oshi Priya, Data Protection in EdTech Start-ups: An Analysis,

    7 Siddharth Sonkar, The Absence of a Data Protection Law Renders the Fundamental Right to Privacy Meaningless,

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