Edtech Giant BYJU’S, Among Others Under Govt Scanner For Misselling Courses: Report

The Department of Consumer Affairs has reportedly taken a serious note of certain edtech companies in India over the alleged misselling of courses. One of the companies named by the ET report was BYJU’S and its group companies.

The meeting was between the executives of several edtech companies and the India Edtech Consortium (IEC) on June 24, 2022. The consumer affairs ministry had then highlighted that there have been consumer grievances against these companies, most of these complaints were against Bengaluru-based BYJU’S and its group units since the startup caters to a large student base.

The meeting was attended by several IEC member companies such as upGrad, BYJU’S, Unacademy, Vedantu, Great Learning and WhiteHat Jr in New Delhi where the officials discussed a slew of issues relating to unfair trade practices and misleading advertisements by edtech players. 

Of these, BYJU’S Divya Gokulnath alongside other senior executives shared a detailed action plan with officials to address the complaints. It is to be noted that Gokulnath is a member of the India Edtech Council and the meeting is said to be a proactive action.

The company, which is also India’s most valued startup, has also been advised to work with the Advertising Standards Council of India (ASCI) for the claims it makes in the ads.

Cracking Down The Whip On Edtech

The move comes shortly after the ministry stated that the edtech companies have been warned to self-regulate and curb unfair trade practices or stringent guidelines would be formulated to ensure transparency,

The department officials, the report added, had claimed that a total of 147 consumer complaints were received against edtech startups and will be soon sharing the full list of complaints with these companies soon. 

The ET report further suggests that ASCI had received a total of 5,532 complaints of which 33% were from the education sector and 6% of the education sector’s complaints were from the edtech sector. While essentially <2% of the total complaints were in the edtech sector, ASCI’s report stated something different.

According to ASCI’s annual complaints report, the education sector emerged as the largest violator of the advertising code between April 2021 and March 2022. Nearly 33% of the total 7,631 complaints pertained to education sector, which is 2,500+ complaints.

Further, these complaints are not new developments, considering several startups including BYJU’S and WhiteHat Jr have lately been under the consumer radar for alleged mis-advertisements, especially after the case between WhiteHat Jr and Pradeep Poonia in 2020-2021.

The meeting is also in the continuation of the Union government’s panel formation to probe exorbitant claims made by edtech platforms. 

Even education institutions have cracked a whip on edtech. Only last year, the University Grants Commission (UGC) also issued a diktat to higher educational institutions (HEls), calling them to withdraw any degree or diploma programmes offered in partnership with edtech companies.

With schools reopening and the onslaught of funding winter, edtech players are in deep water. Further, there are edtechs such as Unacademy and BYJU’S struggling with fundraising. Then the grim layoffs within the sector (highest among all), the shutdown of three edtech firms Crejo.Fun, Udayy and SuperLearn, and now the increased scrutiny from the regulators—- the $3 Bn market is currently in a tough spot.

Update | July 21, 2022, 8:30 AM

ASCI’s report mentions that 33% of the complaints were from the education sector. The story has been updated to reflect the same.