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03 Jun SAMR Fines 15 Private Tutoring Institutions RMB36.5m for False Advertising
China’s State Administration for Market Regulation (SAMR) imposed a fine of RMB36.5m (USD5.7m) in total on 15 educational companies across the country, as reported by Xinhuanet on June 1. The 15 institutions include New Oriental [EDU:US], TAL Education’s [TAL:US] Xueersi Online School, Wallstreet English, Alibaba-backed [BABA:US] Zuoyebang, and Tencent-backed [0700:HK] Yuanfudao. These tutoring schools are accused of false publicity, such as fabricating teacher qualifications, exaggerating tutoring effects, fabricating user reviews, and so on. Besides, SAMR also found in the investigations that some institutions claimed to offer huge discounts on their course packages to attract parents and students, while they never sold those courses at their original prices.
In recent years, the Chinese K12 after-school tutoring market is booming, especially during the pandemic. According to the report released by the Chinese Society of Education, the market reached over RMB800bn (USD125bn) in market value in 2016, a result driven by the increasing after-school study demands of parents and students. This booming industry has not only reinforced the immense pressure on Chinese students but also fostered a great deal of discontent among consumers. Based on SAMR’s 12315 consumer complaining and reporting hotline and network, there were 155,000 education and training service-related complaints and reports in 2020, accounting for 8.21% of the total complaints and reports and ranking fourth in service-related complaints and reports. In the first quarter of 2021, there have already been 47,100 complaints about education and training services, an increase of 65% from the same quarter in 2020. During the press conference on June 1, SAMR said that it would build a long-term mechanism to tighten the supervision over the private tutoring market, continue investigations on both online and offline educational institutions, and deal with violations in the market.