A learning curve for edtech self-regulation

By Ashima Obhan, Obhan & Associates

With more than a quarter of its population in the 0-14 age bracket, one of the largest higher education networks in the world and internet penetration growing strongly, it is no surprise that India’s education sector has become the centre of attention. The government has expressed a growing interest in the edtech sector, outlining a vision for its future in the 2022 Budget that includes a multilingual digital university, an e-portal for upskilling and virtual science and math labs. The question, however, is whether the edtech industry is prepared to meet, and even exceed, expectations.

A learning curve for edtech self-regulation Ashima Obhan
Ashima Obhan
Senior Partner
Obhan & Associates

The edtech sector has been criticised for its lack of regulatory oversight. For example, reports of low-income families being made to agree to expensive loan terms to pay for online tutoring came to official attention, prompting the Education Ministry to issue a press release in December 2021 (release). The release, besides expressing concerns over the functioning of the sector, also serves as advice for learners and guardians. It suggests avoiding auto-debit mandates; conducting background checks on companies; recording evidence of spam calls and forced sign-ups; not trusting success stories, not sharing bank account details or signing up for loans and so on. The release also points out that there is redress under the Consumer Protection (E-Commerce) Rules, 2020, and lays down advertisement guidelines for edtech companies, besides referring to the Advertising Standards Council of India’s (ASCI) Code for Self-Regulation.

The release signalled impending regulation and was followed by an announcement to that effect. Perhaps in a move to pre-empt outside intervention, edtech companies in January formed an industry consortium, the Indian Edtech Consortium (IEC), under the aegis of the Internet and Mobile Association of India. It counts among its members Byju’s, Careers 360, Harappa, Unacademy, upGrad, Vedantu and WhiteHat Jr.

The IEC has prepared a self-regulatory code of conduct (code), which includes a two-tier grievance redress mechanism. Tier I provides for an internal complaint forum within the member company; Tier II involves an autonomous self-regulatory body, the Independent Grievance Review Board, formed by the IEC’s management committee. The code emphasises the importance of transparent and ethical practices in sales and advertising in the sector.

Ethical Sales. Following the maxim of what is told is what is sold, the code prohibits mis-selling and requires that examples of successful students and claims be evidenced by validated proof of performance. Suggested practices for members include regular training for sales forces, disincentives and penalties for mis-selling and internal standard operating procedures to prevent mis-selling.

Advertising. Encouraging ethical and transparent communication, and discouraging the disparagement of competitors are key principles. Advertising that targets minors or marketing that introduces minor-related products to parents must comply with truth-in-advertising standards. Suggested practices include using legally-defined qualifications, such as MBA, only when they meet University Grants Commission or All India Council for Technical guidelines, and ensuring that students are not falsely led into believing they are earning a formal qualification. There must be no false narrative that offered courses are recognised by, or affiliated to, any government body.

Robust financing. There must be transparent and clear communication, making consumers aware of all financial arrangements including loans, financing, payment terms, and refunds. It is recommended that members adopt payment processing standards relating to refunds, trial periods and money-back guarantees; prominently display refund and cancellation policies on the platform; provide FAQs with illustrations, and maintain an authenticated record of financing-related documents for every learner.

The IEC has submitted the code to the government. Reports suggest that the government is holding off announcing regulations for the sector, whilst it monitors the implementation of the code. While the code is certainly a step towards effective self-regulation, its success depends on the diligence with which it is implemented, and whether it produces the desired results.

Ashima Obhan is a senior partner at Obhan & Associates

Obhan & Associates

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