Skip to content

THE IMPACT OF DPDPA ON THE ED-TECH INDUSTRY 

Article by Tsaaro

7 min read

INTRODUCTION: 

The enactment of the Digital Personal Data Protection Act, 2023, marks a significant milestone in the realm of data privacy and protection in India. This Act affects all sectors including ed-tech industry which has witnessed rapid growth in the country over the last few years. The India ed-tech market size was valued at $5.13 billion in 2023. The Indian ed-tech market recorded strong growth in 2023 due to the rise in internet penetration and digital literacy. Ed-Tech facilitates scale and speed using a direct-to-device model, thus breaking geographical barriers for students and helping them get quality education from leading institutions.  

The enactment of DPDPA will have profound impact as it brings both an advantage and a disadvantage for the emerging ed-tech industry in India. Since the ed-tech sector thrives on huge amounts of personal data to provide personalized learning experiences to its users, therefore, it is critical to understand implications of DPDPA for compliance and growth purposes. Furthermore, a large portion of the user base in these industries in India comprises children, necessitating additional compliance requirements under the DPDPA. 

In this blog, we will examine the impact of DPDPA on ed-tech Industry and then explore several measures that companies need to take to ensure that they comply with legislation and exploit opportunities for their business expansion. 

KEY PROVISIONS OF DPDPA RELEVANT TO EDTECH: 

The DPDPA will apply to all ed-tech platforms that process data within India. It will also apply to platforms that process data outside India if the processing relates to offering goods or services to Data Principals within the territory of India. Therefore, once the DPDPA is enforced, these ed-tech platforms must comply with requirements of the law. These requirements are: 

  • Consent and Lawful Processing: Section 4(1) of the DPDPA mandates that personal data processing must be based on lawful purposes, with explicit and informed consent from Data Principals. Ed-Tech companies must ensure that they obtain clear consent, explaining the purpose and scope of data collection and usage before processing their data. They must serve the consent notice to the Data Principal in a manner specified in the Act.

  • Limiting Data Retention Periods: Ed-Tech companies must refrain from retaining personal data for a period longer than required for the specified period. Furthermore, DPDPA provides that data fiduciary must erase the data of a student upon their request unless retention of the same is necessary for the specified purpose or for compliance with any law for the time being in force. Therefore, ed-tech industries must comply with these requirements and not retain data of students beyond the retention period for any purpose such as targeted advertisement and marketing.  

  • Transparent Communication About Data Usage: Ed-tech institutions should clearly inform their users about how their data will be used, shared, and processed. This transparency is critical to maintaining compliance with the Act, which mandates informed consent. Furthermore, when these ed-tech industries involve other entities (data processors) to process data on their behalf for offering any kinds of goods or services to students, this must be done under a valid contract. 

  • Data Fiduciaries and Data Principals’ Rights: Ed-Tech platforms, as Data Fiduciaries, have a duty to protect the rights of Data Principals. DPDPA grants several rights to Data Principal under the Act, including the right to access information about personal data, right to correction and erasure of personal data etc. Students and parents can request information about their data, demand corrections, updates, and even erasure of their personal data. Thus, ed-tech institutions need to maintain robust systems to manage these requests efficiently. 

  • Protection of Minors’ Data: The Act places stringent requirements on processing the personal data of children. Section-9(1) of the Act establishes a specific set of obligations that Data Fiduciaries, entities responsible for managing personal data, must adhere to when processing the personal data of a child. This provision mandates that before any processing of personal data occurs for children, a clear and verifiable consent must be obtained. This consent, which serves as a fundamental element in ensuring lawful data processing, is acquired either from the parent of the child or a lawful guardian, where applicable. Therefore, ed-tech platforms must verify the age and identity of children and obtain verifiable parental consent, ensuring that data collection practices are secure and transparent. 

  • Data Security Safeguards: The Act obligates Data Fiduciaries to implement reasonable security measures to protect personal data from breaches. For ed-tech companies, this translates to investing in advanced cybersecurity infrastructure and regular audits to safeguard Personal Identifiable Information.  

  • Data Breach Notifications: Section 8(6) of the Act provides that in the event of a personal data breach, the Data Fiduciary shall give the Board and each affected Data Principal, intimation of such breach in such form and manner as may be prescribed. Therefore, in the event of a data breach, ed-tech companies must promptly notify the Data Protection Board and affected individuals, providing details of the breach and the measures taken to mitigate its impact. This requires having a well-defined incident response plan in place. 

CHALLENGES FOR THE ED-TECH INDUSTRY: 

The enactment of DPDPA poses certain challenge to the ed-tech industries. These challenges are: 

  • Compliance Costs: The level of investment in the required data protection measures might, in turn, be quite expensive for some of the small Edtech startups. Therefore, high technological investments, legal advice, and training might be necessary to ensure compliance. 
  • Complexity of Consent Management: Managing consent for a diverse user base, especially when dealing with minors, adds complexity. Edtech companies must develop user-friendly interfaces to obtain and manage consent, ensuring clarity and transparency. 
  • Data Localization Requirements: While not explicitly mandated by DPDPA, potential localization requirements could pose challenges for Edtech platforms that operate internationally, necessitating adjustments in data storage and transfer practices. 
  • Balancing Personalization and Privacy: Edtech thrives with personalized learning experiences, and such experiences in turn are based upon vast analyses of data. To strike a balance between the use of big data as a facilitator for such personalization with somewhat strict norms of privacy will be one of the most important challenges. 

OPPORTUNITIES FOR THE ED-TECH INDUSTRY: 

The DPDPA enhances the compliance and operational requirements for ed-tech platforms. On the other hand, this also gives these institutions an opportunity to build measures aiming for compliance under the laws and establish its presence at the global level. These opportunities include: 

  • Building Trust: Compliance with DPDPA can enhance trust among users. Demonstrating a commitment to data privacy can be a unique selling point, attracting more users who are increasingly aware of and concerned about their digital rights. 
  • Innovation in Data Management: The need for compliance can drive innovation in data management practices. Ed-tech companies can develop advanced tools for data anonymization, secure data sharing, and efficient consent management, setting new industry standards. 
  • Competitive Advantage: Early adopters of DPDPA-compliant practices can gain a competitive edge. By leading in data protection, ed-tech companies can position themselves as industry leaders, setting benchmarks for others to follow. 
  • Global Alignment: As data protection becomes a global priority, aligning with DPDPA prepares ed-tech companies for international regulations. This alignment can facilitate smoother expansion into other markets with stringent data privacy laws. 

CONCLUSION: 

The enactment of the Digital Personal Data Protection Act, 2023, represents a pivotal moment for the ed-tech industry in India. It outlined strict compliance requirements and operational costs but brought immense opportunities for growth and innovation. Compliance with the provisions of the DPDPA will enable ed-tech companies to build better trust among users, drive advancement in managing data, and create a competitive edge within the market. This will enhance not only protection with regard to personal data but also credibility and reliability related to ed-tech platforms.  

Tsaaro Consulting

Introduction  Singapore’s Personal Data Protection Act (PDPA) is the cornerstone of the country’s data protection framework, ensuring that organizations manage …

Tsaaro Consulting

“It was invigorating to have a new competitor… DeepSeek’s model is impressive, particularly around what they’re able to deliver for …

Tsaaro Consulting

Introduction The Digital Personal Data Protection Act 2023 (DPDP Act) provides that consent is a prerequisite to process the personal …

Tsaaro Consulting

The Digital Personal Data Protection (DPDP) Act, 2023, introduces an overall approach to the protection of the digital personal data …

Tsaaro Consulting

Today, personal data has become one of the most valuable resources, powering industries and shaping digital economies. However, the misuse …

SHARE THIS POST

Would you like to read regular updates from Tsaaro.
Subscribe to our newsletter

Our Latest Blogs

Read what the latest hapennings in the cyber world are and learn what the
experts have to say about them

Call Our Experts:

+91 95577 22103

small_c_popup.png
small_c_popup.png
small_c_popup.png
small_c_popup.png
small_c_popup.png
small_c_popup.png
small_c_popup.png
small_c_popup.png
small_c_popup.png
small_c_popup.png
small_c_popup.png
small_c_popup.png
small_c_popup.png
small_c_popup.png
small_c_popup.png
small_c_popup.png
small_c_popup.png

We’d love to help your organization achieve your Data Protection goals!

Schedule a complimentary consultation with our Team of Experts.