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US tech firms warn planned Vietnam law will hamper data centers, social networks – Tech
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US tech firms warn planned Vietnam law will hamper data centers, social networks – Tech

S Technology companies have warned the Vietnamese government that a bill to tighten data protection rules and limit data transfers abroad would prevent social media platforms and data center operators from growing their businesses in the country.

The Southeast Asian nation, with a population of 100 million, is one of the world’s biggest markets for Facebook and other online platforms and aims to grow its data center industry exponentially with foreign investment over the next years.

The bill “will make it harder for technology companies, social media platforms and data center operators to reach the customers who rely on them every day,” said Jason Oxman, who chairs the Information Technology Industry Council (ITI), a trade association representing technology companies including Meta, Google and data center operator Equinix.

The bill, under discussion in parliament, is also meant to ease authorities’ access to information and was requested by the Ministry of Public Security, Vietnamese and foreign officials said.

The Ministry of Public Security and the Ministry of Information did not respond to attempts to contact them by email and phone.

Vietnam’s parliament is debating the law in its current month-long session and is scheduled to pass it on Nov. 30 “if eligible,” according to its schedule, which is subject to change.

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Existing Vietnamese regulations already limit cross-border data transfers in certain circumstances, but these are rarely enforced.

It is unclear how the new law, if passed, would impact foreign investment in the country. Reuters reported in August that Google was considering setting up a large data center in southern Vietnam before the bill was introduced in parliament.

Research firm BMI said Vietnam could become a major regional player in the data center industry as limits on foreign ownership are set to end next year.

Among the bill’s provisions is prior authorization for the transfer abroad of “basic data” and “important data,” which are currently loosely defined.

“That will hamper foreign business operations,” Oxman told Reuters.

Tech companies and other firms favor cross-border data flows to cut costs and improve services, but several jurisdictions, including the European Union and China, have limited such transfers, saying it allows them to better protect privacy and sensitive information.

Under the draft law, companies will have to share data with the Communist Party of Vietnam and state-run organizations in multiple, vaguely defined cases, including to “perform a specific task in the public interest.”

The U.S. tech industry has raised concerns with Vietnamese authorities about the “unwarranted expansion of government access to data,” Oxman said.

The new law “would pose significant compliance challenges for most private sector companies,” said Adam Sitkoff, executive director of the American Chamber of Commerce in Hanoi, noting that discussions were underway to persuade authorities to “reconsider the rushed legislative process.” for the law.