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India’s ed-tech is a predatory market. Modi govt can learn from UK, US

Companies like Byju’s, Unacademy might have adopted a ‘code of conduct’ to ward off regulation, but Modi govt must still fill digital governance gaps.

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Amid talk of a specialised policy framework soon for India’s burgeoning ed-tech industry, according to Union Education Minister Dharmendra Pradhan, some of the biggest players like Byju’s and Unacademy have organised themselves into a consortium and adopted a ‘common code of conduct’, presumably to ward off external regulation. Over the past few months, there have been calls for greater regulatory oversight within and outside Parliament for an industry that generates around $2 billion annually.

The ed-tech ecosystem is exceptional since education is a prerequisite to individual and societal progress. This means companies in the sector perhaps have a greater fiduciary responsibility towards their consumers than most other digital market segments.

It is, therefore, important to understand the two most vocalised societal demands to provide an initial roadmap for an ed-tech policy.


Also Read: Unacademy, Byju’s help clear your doubts, but have few answers on data privacy


Ed-tech’s aggressive marketing practises

The first is linked to aggressive marketing practises that are designed to prey on children and their parents. For instance, Congress MP Karti Chidambaram had written a letter to the education minister last December about the “false claims” companies make in their advertisements. These include claims that ed-tech companies have “helped aspirants crack UPSC (Union Public Service Commission) exams by collecting aspirants’ data when they utilise the free resources.” Another concern is the lack of disclosures and transparency in the services offered by ed-tech companies. According to Chidambaram, this includes a lack of clarity on aspects such as “learner retention” and “improvement in grades”.

Consequently, the education ministry released a light-touch advisory on ed-tech. This short document called on users to exercise caution while paying for ed-tech services, many of which rely on a ‘freemium model’. The freemium model enables users to sample ed-tech services, sometimes without sufficient warning about charges they have to pay if they fail to explicitly opt-out of follow-on subscriptions. The advisory also asks parents and users to look at online reviews and register grievances before availing ed-tech services.

At its worst, ed-tech does represent a predatory market that profits from people’s aspirations for their children and themselves. This business impulse is not limited to online education. The National Education Policy (NEP), 2020, makes it a point to call out the need to stop “commercialisation of education” and associated “profiteering” even in traditional, brick-and-mortar education. However, the same policy encourages private sector participation and “digital pedagogy” as critical to improving educational outcomes. There is no doubt that both private capital and technology are needed to bridge gaps in access to quality education. Therefore, at its best, a well-regulated ed-tech industry could prove to be a great leveller.


Also Read: Don’t get lured by ads of ed-tech firms, do your research to avoid fraud, govt tells parents


Need for horizontal regulations

Ed-tech requires a horizontal and cross-cutting governance framework rather than an industry-specific or siloed one. This is because key policy gaps in ed-tech intersect with many known digital governance gaps. Let’s consider advertising and marketing-related concerns first. The need of the hour is for a policy to differentiate between targeted ads from misleading or false ones. The former is a data protection concern, whereas the latter is a consumer protection one.

The majority of digital market revenues stem from targeted advertising based on user data. To wit, Google and Facebook earn around 80 and 99 per cent of their respective revenues from digital advertising. Personal data such as name and age, as well as non-personal data such as preferences and biases of users, are solicited or inferred and subsequently harnessed to better target ads.

Since targeted advertising is the cornerstone of commerce on the internet today, India must regulate the use of data for such activities. Previous articles in this series have argued for the need for a data protection law that strikes a sensible balance between user privacy and commercial interests. This assumes even greater importance in the context of minors’ data that many ed-tech firms collect.

Companies that process children’s data will be subject to stricter compliance requirements as per the proposed Data Protection Bill 2021. For example, ed-tech firms and others that may deal with such data will be required to obtain parental consent and will be barred from profiling, tracking, and behaviourally monitoring children. They are also required to mandatorily register with the Data Protection Authority (DPA), the proposed regulator. Therefore, the policy could frame a coordination mechanism for relevant bodies within the education ministry, to work closely with the DPA. For instance, the ministry could issue model terms of service to protect the privacy of students, similar to those of the U.S. Department of Education, which the DPA could work with the industry to implement.

On the other hand, false or misleading ads are very much within the domain of the newly christened Central Consumer Protection Authority (CCPA). Established in 2020, the CCPA issued draft guidelines to regulate misleading ads last year. This includes requirements that are apt to address ed-tech market concerns, such as the extent of a consumer’s commitment to take advantage of a free offer. However, much like the Data Protection Bill, these guidelines haven’t yet passed muster. A future ed-tech policy should not compound the design failures that have held back such statutes. Instead, it should act as a trigger to resolve them quickly, towards the “light but tight” regulations that the NEP makes a case for.


Also Read: Why bankers, engineers, researchers & other pros are turning teachers on edtech platforms


Where vertical approaches may work

We must also consider general issues such as lack of transparency and disclosures in ed-tech. There are already hundreds of ed-tech companies in India that offer as many variations of courses and follow diverse business models. They require standards that are enforceable and do not throttle the kind of innovation required to make quality education accessible to all. This is one area where global best practices serve as a handy guide. The United States, for instance, allows parents and guardians to audit instructional material, receive notices, and opt-out of marketing material issued by certain educational institutions via the Protection of Pupil Rights Amendment. A wide and calibrated application of such principles that allow for societal participation in the oversight of ed-tech would benefit India, particularly since there is limited State capacity to do this.

The Narendra Modi government can issue specific guidelines to ensure a safe, inclusive, and convenient user experience for any type of e-commerce business, under the Information Technology Act, 2000. It has already done so for social media intermediaries, as well as digital media and news publishers, via industry-specific guidelines in 2021, which endorse self-regulation. This includes provisions related to content standards and consumer grievance redressal. Hence, there is scope to address basic hygiene issues in the education industry that are at the intersection of digital technology and e-commerce.

Finally, ed-tech requires developmental support that is tied to the quality of service standards. Countries like the United Kingdom have official strategies that aim to grow the role of technology in education. These include measures for its government to help schools and other institutions procure “trusted, quality (ed-tech) products”, mandates for ed-tech suppliers to adhere to minimum cyber security standards, support for all schools to access quality broadband infrastructure to enable ed-tech, and for the UK to cement its global leadership in education through the use of technology. There are several cues for Indian policymaking on ed-tech here too. They must take note.

The author works at Koan Advisory Group, a technology policy consulting firm. Views are personal.

This article is part of ThePrint-Koan Advisory series that analyses emerging policies, laws and regulations in India’s technology sector. Read all the articles here.

(Edited by Srinjoy Dey)

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