New Zealand-owned educational technology companies are pledging not to spy on schoolchildren.

Edtech surveillance by multinational tech companies to harvest pupils' personal data is provoking controversy, clampdowns and court cases in the US and Europe.

The NZ Tech Alliance said it was unclear whether these practices were occurring in New Zealand.

However, schools without much money were being forced to rely on free software from major offshore providers with questionable data collection practices, the alliance said.

Critics say the quid pro quo is the providers get to harvest student data, to sell on to data brokers, for advertising, but also to use the AI to assess and guide student learning in an opaque way.

"If the product is free, then you're the product," said the alliance's Dave Moskovitz, a council member of the subgroup EdTechNZ.

Local products and services tended to not be free, he said.

The government's stance still favoured big global tech, but local firms could use the incoming pledge to set themselves apart, Moskovitz said.

"What it enables local software providers to do, is say, 'We care about privacy, and these are the ways in which we care about privacy, and this is how we're going to steward this important taonga of your students'.

"Try to get something like that out of one of the overseas platforms - you won't."

The pledge, which has been out in draft form, will be an undertaking not to share schoolchildren's data with third parties or use it to advertise to students.

The Education Ministry's two big edtech contracts are with Microsoft and Google.

Both companies say they protect student data but have been subject to clampdowns and court cases overseas.

Moskovitz said the ministry was very slowly showing signs of beginning to listen to local edtech.

"The ministry will claim ... that they don't want to favour anyone, but in fact ... they do favour the large platforms because they have these all-encompassing large contracts with them."

It would be an improvement when Microsoft and AWS set up data centres in New Zealand, so student data was not stored offshore, but this form of "data residency" was no substitute for real "data sovereignty" where full control was retained here, he said.

EdTechNZ put out a 92-page report last year but it barely mentioned privacy or data sharing.

The Privacy Foundation said any pledge should be developed in consultation with a broader group including non-commercial stakeholders, such as the Privacy Commissioner and non-government organisations.

It said the draft pledge was similar to an American one put out by the Future of Privacy Forum along with the software industry six years ago and updated in 2020.

The Education Ministry in this country, in defence of its contracts, has cited the fact that Microsoft and Google have both signed the US Student Privacy Pledge, which the ministry called "a voluntary but legally binding industry pledge to safeguard student privacy regarding the collection, maintenance, and use of student personal information".

The two tech giants also both held ISO certifications for privacy and "place reliance upon these independently audited certifications", the ministry said.

The US initiators of the pledge said it stood as a "clear industry commitment" to protect students' information.

An education watchdog group, The 74, called it a "self-regulatory effort", while the Electronic Frontier Foundation said it provided "false assurance due to numerous loopholes".

Last month, signatory Illuminate Education was booted off the pledge and referred to the US Federal Trade Commission, after its servers were hacked, exposing the personal information of more than a million students - not just their names, but also in some cases their migrant status, attitudes in class and run-ins for discipline.

When Illuminate signed up in 2016, it said "by signing this pledge, we are making a commitment to continue doing what we have already been doing from the beginning - promoting that student data be safeguarded and used for encouraging student and educator success!"

The Privacy Foundation in New Zealand said the question was if this country would follow the US and run into the same problems after several years "or maybe we could make it better from the beginning".