What Happens to Student Data Privacy When Chinese Firms Acquire U.S. Edtech Companies?
By Jenny Abamu Apr 24, 2018
Between the creation of a social rating system and street cameras with facial recognition capabilities, technology reports coming out of China have raised serious concerns for privacy advocates. These concerns are only heightened as Chinese investors turn their attention to the United States education technology space acquiring companies with millions of public school users.
A particularly notable deal this year centers on Edmodo, a cross between a social networking platform and a learning management system for schools that boasts having upwards of 90 million users. Net Dragon, a Chinese gaming company that is building a significant education division, bought Edmodo for a combination of cash and equity valued at $137.5 million earlier this month.
Edmodo began shifting to an advertising model last year, after years of struggling to generate revenue. This has left critics wondering why the Chinese firm chose to acquire Edmodo at such a price, some have gone as far as to call the move a data grab.
as data becomes a tool that governments such as Russia and China could use to influence voting systems or induce citizens into espionage, more legislators are turning their attention to the acquisitions of early-stage technology startups.
NetDragon officials, however, say they have no interest in these types of activities. Their main goal in acquiring United States edtech companies lies in building profitability, says Pep So, NetDragon’s Director of Corporate Development.
In 2015, the firm acquired the education technology platform, Promethean, a company that creates interactive displays for schools. NetDragon executives say that the Edmodo acquisition rounds out their education product portfolio—meaning the company will have tools for supporting multiple aspects of learning including; preparation, instructional delivery, homework, assignment grading, communication with parents students and teachers and a content marketplace.
NetDragon’s monetization plan for Edmodo focuses on building out content that gets sold via its platform. Similar to tools like TeachersPayTeachers, So hopes to see users putting up content on the platform’s marketplace, some free and others for a fee (including some virtual reality content), so that the community can buy, sell and review available educational tools.
As far as data privacy is concerned, So notes that NetDragon is still learning what it can and cannot do. He noted that the company will comply with Children’s Online Privacy Protection Act (COPPA), a federal regulation created in order to protect the privacy of children online, but says that the rules and regulations surrounding the law are confusing for all actors involved.
Historically, Chinese companies have faced trust and branding issues when moving into the United States market, and the reverse is also true for U.S. companies seeking to expand overseas. Companies have also struggled to learn the rules, regulations and operational procedures in place in other countries.
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more on data privacy in this IMS blog: