Govt Warns Ed-tech Companies Against Unfair Trade Practices, Misleading Ads

The central government has warned the ed-tech companies against unfair trade practices and said that if self-regulation does not curb the unfair trade practices, then stringent guidelines would require to be formulated for ensuring transparency.

Consumer Affairs Secretary Rohit Kumar Singh held a meeting with the self-regulatory body, India Edtech Consortium (IEC), which runs under the aegis of the Internet and Mobile Association of India (IAMAI), in New Delhi on Friday. “Singh said that if self-regulation does not curb the unfair trade practices, then stringent guidelines would require to be formulated for ensuring transparency,” the consumer affairs ministry said in a statement on Friday.

The meeting was attended by representatives of IAMAI, along with IEC member companies including upGrad, BYJU’S, Unacademy, Vedantu, Great Learning, WhiteHat Jr. and Sunstone.

During the meeting, issues pertaining to unfair trade practices and misleading advertisement for the Indian edtech sector figured prominently. The secretary discussed ways to better manage consumer interests across India’s edtech ecosystem. IEC comprises Indian start-ups and represents 95 per cent of the Indian learner community. As part of the agenda, the members discussed the need to further enhance the Indian edtech ecosystem to better safeguard consumer interests, through seamless, transparent, and feasible offerings for consumers.

According to the statement, the secretary said it has been reported that certain advertisements and practices do not seem to conform to prevalent guidelines and existing regulations. Therefore, it’s imperative to work together to maintain robust checkpoints that align with the consumers’ interests.

“The problem of increasing fake reviews was also a major point of concern which needed to be contained. Notably, a recent report by ASCI revealed that education category is the largest violator of advertising code in 2021-22. The Secretary also advised IEC to continue with their positive efforts to serve the ecosystem and form a joint working group with relevant stakeholders to create the SOPs (standard operating procedures) in this regard,” the statement added.

The industry members briefed the secretary about the progress of the IEC and the direction of ongoing efforts to improve awareness and welfare of learners.

According to the consumer affairs ministry, any advertisement or promotion through Television, Radio, or any other electronic media, Newspapers, Banners, Posters, Handbills, wall-writing etc. to misrepresent the nature, characteristics, qualities or geographic origin of goods, services or commercial activities so as to mislead the consumer could be broadly defined as a misleading advertisement.

Earlier in June, the government came out with new guidelines to prevent misleading advertisements, including those targeting children and making free claims to woo consumers. The guidelines also specify due diligence to be carried out while endorsing in advertisements.

Announcing the guidelines, Consumer Affairs secretary Rohit Kumar Singh said: “Advertisements have great interest for consumers. Under the CCPA Act, there are provisions to handle misleading advertisements affecting consumers rights.”