US tech firms warn Vietnam’s planned law to hamper data centres, social media

US tech companies have warned Vietnam’s government that a draft law to tighten rules on data protection and limit data transfers abroad would hamper social media platforms and data centre operators from growing their businesses in the country.

The Southeast Asian nation with a population of 100 million is one of the world’s largest markets for Facebook and other online platforms, and is aiming to exponentially increase its data centre industry with foreign investment in coming years.

The draft law “will make it challenging for tech companies, social media platforms and data centre operators to reach the customers that rely on them daily,” said Jason Oxman, who chairs the Information Technology Industry Council (ITI), a trade association representing big tech companies including Meta , Google and data centres operator Equinix .

The draft law, being discussed in parliament, is also designed to ease authorities’ access to information and was urged by the ministry of public security, Vietnamese and foreign officials said.

The ministry of public security and the information ministry did not respond to attempts to contact them via email and phone.

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

Existing Vietnamese regulations already limit cross-border transfers of data under some circumstances, but they are rarely enforced.
It is unclear how the new law, if adopted, would impact foreign investment in the country. reported in August Google was considering setting up a large data centre in southern Vietnam before the draft law was presented in parliament.

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