FINANCIAL TIMES
12-12-18

Google and Facebook push back on Vietnam’s sweeping cyber law

Hanoi joins global push to rein in power of the technology giants

John Reed

Google, Facebook and other technology groups are urging Vietnam to scrap a requirement that they store data in-country just days before a sweeping cyber security law comes into force, as Hanoi joins a global crackdown on the power of US internet giants.

The companies, speaking through the Asia Internet Coalition, their regional lobby group, said the localisation requirement would stifle investment, harm economic growth and hurt foreign and Vietnamese companies with an online presence. 

Global regulators are trying to rein in the market power and perceived privacy intrusions by the likes of Google and Facebook. EU antitrust officials this year fined Google €4.3bn for exploiting the market power of its Android operating system, and Australia this month made an issue of Google’s “near monopoly” position in search. US and British lawmakers have also scrutinised Facebook’s handling of personal data.

Vietnam’s government, which passed its law in June, said it was following other countries in checking the power of tech companies and curbing malicious content. The country is also keen to bolster its cyber-defences at a time of rising tension with China. However, human rights groups say it could be used to crack down on free expression, and internet companies are warning it will be bad for business.

The tech industry voiced its concerns on Thursday in its official submission on the law’s implementation, seen by the Financial Times, which was conveyed to To Lam, head of Vietnam’s powerful Ministry of Public Security, the main government body behind the law.

The AIC said the provisions on data localisation were “a signal towards a hostile policy environment for the digital economy and for businesses in general”.

“In recent years, cyber security has been an issue of special interest for many nations, international and regional institutions,” Vietnam’s ministry of foreign affairs said, when asked to respond to the criticism.

“The development of cyber security legal framework is necessary in current situation.”

Vietnam has not yet published a crucial decree laying out how the law, which takes effect on January 1, will be implemented, although it has floated drafts. The law is a top concern among companies that provide online services in Vietnam. 

“We urge the Ministry of Public Security and the government of Vietnam to consider the potential consequences of the draft decree in order to prevent unexpected negative impact on the Vietnamese economy,” the companies wrote to Mr Lam. 

In addition to requiring companies to store data in Vietnam, the law will allow Vietnamese authorities to audit users’ data in cases or censor content where it thinks national security is at stake.

The AIC also said the law could violate Vietnam’s trade agreements, including its new free trade agreement with the EU. Vietnam’s government has denied this. 

Vietnam’s cyber security law poses a dilemma for companies, which are worried about the costs and reputational risks of the law, while eyeing one of Asia’s fastest-growing economies. More than 64m of the country’s population of 96m are online. 

Vietnam’s government this week said Google was weighing steps to open an office in Vietnam, but Google said it had nothing to announce. 

According to We Are Social, the consultancy, Facebook and Google are the country’s two most visited websites. Social media are principal conduits for news and discussion in a country where the state censors media, but free speech is broadly accepted. 

Unlike China with its “great firewall”, Vietnam allows foreign social media and search giants to operate, though authorities already make regular requests to take content down or suspend accounts, which tech companies say they address on a case-by-case basis.

Social media played a role in street protests that swept through Vietnam in June against special economic zones that protesters feared would give Chinese companies new powers.

Some of the demonstrators protested against the law itself. Human Rights Watch and Amnesty International have both condemned the law, describing it as repressive.