US Tech Giants Express Concern Over Vietnam's Proposed Data Law
US tech firms caution Vietnam on proposed data law impacting social media and data centres. Concerns raised over potential hindrance to foreign investment and business operations. Draft law includes provisions for prior authorisation of data transfers and increased government access to data.
The proposed legislation has raised concerns among industry leaders, who fear it could impede the growth of social media platforms and data centre operators within the country.
Vietnam, with a population of 100 million, is a key market for tech giants like Facebook and is looking to attract more foreign investment to expand its data centre industry significantly in the coming years. Jason Oxman, chair of the Information Technology Industry Council (ITI), representing major tech firms such as Meta, Google, and Equinix, expressed that the draft law could pose challenges for companies in reaching their daily customers.
The draft law, currently under discussion in parliament, not only aims to tighten data regulations but also seeks to facilitate authorities' access to information, as per Vietnamese and foreign officials. Despite attempts to reach out to the ministry of public security and the information ministry for comments, there has been no response.
Vietnam's parliament is in the process of deliberating the law during its month-long session, with a scheduled vote on November 30, subject to eligibility. While existing regulations in Vietnam already restrict cross-border data transfers in certain cases, enforcement has been limited. The potential impact of the new law on foreign investment remains uncertain.
Tech giant Google had been considering establishing a large data centre in southern Vietnam, as reported by Reuters in August, prior to the introduction of the draft law. Research firm BMI has suggested that Vietnam could emerge as a significant player in the regional data centre industry, especially with the upcoming removal of restrictions on foreign ownership next year.
One of the key provisions of the draft law is the requirement for prior authorisation for the transfer of "core data" and "important data" abroad, terms that are currently vaguely defined. This could potentially hinder foreign business operations, according to Oxman. The tech industry favours cross-border data flows to enhance services and reduce costs, but various jurisdictions, including the EU and China, have imposed restrictions to safeguard privacy and sensitive information.
Under the proposed law, companies would be obligated to share data with Vietnam's ruling Communist Party and state organisations in various vaguely defined scenarios, including those deemed to be in the public interest. The US tech industry has expressed concerns to Vietnamese authorities about the expanded access to data by the government.
Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi, highlighted that the new law could present significant compliance challenges for private sector companies. Discussions are underway to urge authorities to reconsider the rapid legislative process for the law, indicating a collaborative effort to address the industry's apprehensions.
US tech firms caution Vietnam on proposed data law impacting social media and data centres.
Concerns raised over potential hindrance to foreign investment and business operations.
Draft law includes provisions for prior authorisation of data transfers and increased government access to data.
Source: REUTERS