Government Tells Edtech Players To Curb Unfair Trade Practices, Warns Of Stringent Action

Cracking the whip on edtech players, the central government on Friday (June 1) warned them against unfair trade practices.

If self-regulation does not curb unfair trade practices, then stringent guidelines would be formulated for ensuring transparency, Consumer Affairs Secretary Rohit Kumar Singh told the edtech players during a meeting with industry body India Edtech Consortium (IEC).

The meeting was also attended by IEC member companies, such as upGrad, BYJU’S, Unacademy, Vedantu, Great Learning, WhiteHat Jr., in New Delhi, the government said in a release.

The officials discussed a slew of issues relating to unfair trade practices and misleading advertisement by edtech players. Singh also called on the companies to better manage consumer interests across the ecosystem. 

On misleading advertisements, the secretary pointed out that certain ads did not appear to conform to prevalent guidelines and existing regulations. He called on the companies to maintain robust checkpoints that align with consumer interests. 

He also directed the IEC to form a joint working group with other stakeholders to create relevant standard operating procedures (SOPs) to curb rising fake reviews. 

The participants discussed the need to further enhance the edtech ecosystem to safeguard consumer interests through transparent offerings for consumers.

The meeting comes weeks after the Union government formed a panel to probe exorbitant claims made by edtech platforms. Earlier this year, the University Grants Commission (UGC) had also issued a diktat to higher educational institutions (HEls), calling them to withdraw any degree or diploma programmes offered in partnership with edtech companies.

In January 2022, Education Minister Dharmendra Paradhan also hinted that the government was working on an edtech policy to regulate the space. In December last year, the education ministry issued an advisory urging parents, students, and all stakeholders to be cautious while deciding on opting for online learning or coaching through edtech platforms

Edtech firms have continuously been in the dock over misleading ads. According to the Advertising Standards Council of India’s (ASCI’s) annual complaints report, the education sector emerged as the largest violator of advertising code between April 2021 and March 2022. Nearly 33% of the total 7,631 complaints pertained to edtech customers.

While 2021 emerged as the best year on record for India’s edtech space, 2022 has put a full stop to the funding boom of the past two years. As schools reopen and cash becomes scarce on account of funding winter, the edtech players are struggling to retain students. 

This has forced many players to cut their workforce. The edtech space has seen more than 3,100 layoffs in 2022 so far, while others like Crejo.Fun and Udayy have shut operations.

According to an Inc42 report, the Indian edtech sector is projected to reach a market size of $10.4 Bn by 2025.