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Byju’s is operating like a loan shark, needs to be monitored: MP Karti Chidambaram

Multiple allegations of malpractices have cast a shadow over the company’s rapid growth in the last few years.

“[Edtech companies] are engaging in predatory marketing practices where they prey upon the aspirational poorer people who want to give their children a better education,” MP Karti Chidambaram said in the Lok Sabha on December 13. The Minister of Education needs to monitor such apps, Chidambaram added.

In his speech, Chidambaram pointed out multiple concerns with Byju’s and the edtech industry, including false marketing, social media censorship, and unregulated educational content.

With a growing number of media reports and calls by MPs highlighting malpractices by Byju’s, the pressure is mounting on the government to regulate such predatory practices in the edtech industry. Whether the Ministry of Education will pay heed to these demands remains to be seen.

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Predatory marketing by edtech companies needs monitoring: Chidambaram

Chidambaram left no doubt about the company he was specifically referring to. “This company now sponsors the Indian Cricket Team… We all know who I’m referring to.” The MP pointed out three problems with Byju’s and the edtech industry at large:

  • Predatory practices: Chidambaram accused edtech companies like Byju’s of preying upon aspirational poor people. “They force [poor people] to buy courses and auto debit their accounts. When they want to stop these courses, they can’t stop the auto-debits, which are happening month or month. They are becoming like loan sharks where they’re force-selling these courses,” he said.
  • Content has no oversight: “These companies offer courses online which are not vetted by any body… Nobody knows the content of these courses, nobody knows the quality of these courses. Nobody knows the calibre of the tutors who are conducting these courses,” Chidambaram said.
  • Censorship of criticism: “There are many social activists who have spoken about this… but the power of this company is so much that they are able to bring down complaints on social media,” Chidambaram said referring to recent instances of complaints against Byju’s being taken down for violating Indian laws.
  • Larger than education budget: “Today there are online educational companies which are worth billions of dollars.. that’s more than the entire educational budget of India.” The size of Byju’s, in part, is due to the significant number of acquisitions it has made recently.

Highlighting these problems, Chidambaram called on the Ministry of Education to “monitor these companies and prevent them from doing these predatory marketing practices where they’re auto-debiting unsuspecting customers.”

MediaNama has reached out to Byju’s about these allegations and will update this report once a response is received.

What do we know about predatory marketing from Byju’s

As Byju’s has grown rapidly in the last few years, multiple malpractices from the company have also come to light:

  • False marketing: The false marketing of WhiteHat Jr, which was acquired by Byju’s last year, was first highlighted by activist Pradeep Poonia who claimed the company made false claims about Byju’s students getting lucrative jobs. The company was even called out for misleading ads by the Advertising Standards Council of India.
  • Services not delivered: Hundreds of complaints have been filed against Byju’s by customers who were misled by its sales team into taking loans to afford their charges, according to a BBC report. In many instances, the company did not provide the features the sales team advertised, and refused to refund customers, the report alleged.
  • Social media censorship: Posts critical of Byju’s were taken down from both Twitter and LinkedIn in July last year. While Twitter claimed the posts were taken down due to complaints that they violated Indian laws, LinkedIn told a user whose account was blocked that the company received complaints that the user had posted defamatory content.
  • Loans: Unwanted loans were frequently pushed on customers by the Byju’s sales team, at times without their knowledge, a report by The Ken alleged. Some parents who fell into the trap have even taken legal recourse against the company.

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Written By

Reporter at MediaNama. Email: nishant@medianama.com

MediaNama’s mission is to help build a digital ecosystem which is open, fair, global and competitive.

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