- Proposed legislation may hinder growth of social media and data centers in Vietnam
Athira Sethu
Kochi, 4 November 2024
The US tech companies have told the Vietnamese government that the proposed law to reinforce data protection and limit data transfers will hamper the growth of social media platforms and data centers in the country, a report by Reuters said.
Vietnam is currently a prime market having 100 million people; for organizations like Facebook, and expects to invest foreign capital to expand the data center industry. However, tech companies & data center operators are likely to face hurdles in setting up such centers if the draft legislation is passed.
The draft law, which has regulations for allowing more access of data to the government, is currently under discussion. The draft law requires prior authorization before transferring “core data” and “important data” abroad, though the terms are not defined. Many feel that the proposed norm would “constitute an impediment to continuing foreign business operations”.
Though Vietnam already has regulations that limit cross-border data transfers, these are not often enforced, the report added. This law will also force companies to provide data to Vietnam’s ruling Communist Party and state organizations in several scenarios, including public interest tasks. The law has been criticized over the potential expansion of government access to data.
Tech companies are supportive of cross-border data flows as this reduces costs and enhances services. However, most regions have restricted cross-border data transfers to improve privacy and prevent sensitive information from leaking out including the European Union and China.
According to reports from Reuters, Google had discussed the possibility of opening an enormous data center in southern Vietnam before the draft of the law. Similarly, several others see Vietnam as a suitable geography to set up data centres and other related infrastructure in the South Asian region.
