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Analysis

Vietnam Tightens Cyber Security Law; to Restrict Google, Facebook

Jun 12, 2018 by The Passage Team
Vietnam Tightens Cyber Security Law; to Restrict Google, Facebook

By Nguyen Minh Huong

Vietnam On Tuesday approved the most controversial cyber security law that will force Facebook, Google and other global technology firms to store their data locally and open offices in Vietnam.

The law, approved by 91% of attending lawmakers, was like a slap in the face of many startups in the South East Asia country which kept asking for deferring such laws.

Vo Trong Viet, head of the defense and security committee which drafted the law, said the requirement to store data inside Vietnam was feasible, crucial to fighting cyber crime and in line with international rules.

“Placing data center in Vietnam increases costs for businesses but is a necessary requirement to meet the cyber security need of the country,” he told lawmakers.

However, people in the startup ecosystem disagree the government's viewpoint.

Hung Dinh, an angel investor and CEO and co-founder of art designing startups—US based DesignBold and Austrlia-based JoomlArt—said the law was “going against” the aims of the local government in building the so called “tectonic government” and “startup nation” that they always spoke volume*. *

Vietnam, among other Southeast Asia countries, is ushering startups and is home to a lot of young and tech savvy population. The economy expected to reach the trillion dollar mark by 2035.

A report by Topica Founder Institute (TFI) calculated that there was a 45% increase in number of startups in 2017 compared to the previous year, and a 42% hike in total investment in Vietnam.

Hung said that such a move would hurt investor confidence and they would now shy away from investing in a data-based firm that could not protect their owned data.

Article 26 of the law forced tech companies to hand over potentially vast amounts of data, including personal information, and censor users’ posts to the functional authorities within a day of official request.

Hung thinks the country should not use such tight laws to curb the anti-government fake news from the cyber world which could harm the key economic development of tech startups in the country in the next 10 to 30 years.

Dinh Viet Hoa, founder of the national startup association said Vietnam was already dozens of years behind the world, except in field of technology and cyber world, which it was fast catching up with the developing nations.

Hoa showed his disappointment, saying “now the law kills the last hope, putting us back to where we tried to escape.”

Many startups worry that this law could impact the Vietnamese e-commerce market developed with the rise of internet users. Currently there are over 50 million internet users, accounting for 53% of the total population, with 46 million using social networks.

The growth rate of Vietnamese e-commerce in 2017 reached over 25%, and this rate was likely to be maintained during 2018-2020, according to the Vietnam E-commerce Association.

Petitions are unseen but not yet stopped

Two weeks before, a group of well-known former leaders of Ministry of Science and Technology (MoST), sent a mail asking to ease strict regulations in the laws so that Vietnam still be cyber security safe and not violate the privacy law.

Dang Huu, one of the group member said “cyber security is a technical war not a battle field for using criminal or administrative tools,” asking the National Assembly MoST review the law not the Ministry of Public Securities.

One day before the approval, another group, including 17 different associations of IT and startups, sent a joined mail to the National Assemble asking for postpone of the law for a more consideration.

Working as a cyber security expert in Silicon Valley in the US, Duong Ngoc Thai, 34, said it is true that Vietnam has been one of the most vulnerable countries in term of cyber security with unstopped hacks, however, he thinks that a not carefully reviewed law would cause more problems.

But these voices seem to have reached the lawmakers' ears.

Truong Thanh Hieu, a lawyer at Basico Law Firm said the most dangerous part of the bill was that it could allow the police to touch tech firms at any time for any reason instead of a clear reason for checking.

Earlier, the United States and Canada had urged Vietnam to defer the vote and review the cyber law to ensure it aligned with international standards amid worries it may present serious obstacles to Vietnam’s cyber security and digital innovation future.

The Amnesty International has written a letter to the chief executive officers of Apple, Facebook, Google and Microsoft and to the chairman of Samsung outlining its concerns on the law and urging the companies to exert pressure on Vietnam’s government.

As the most active business community of Vietnam, Hung Dinh and his fellows don’t want to lose hope. Though the law is passed, it is set to take effect on the first day of 2019 and they still have half a year to ask for a change.

Dinh says the startup community succeeded in asking for a deletion of article 292 in the Penal Code, and now they could join and ask for deferring the implementation of this law so that it can be revised to best serve the country.

As one of the leaders in the local startups, Hung believed “The Government will listen to us like the way they often do.”

The author is the editor of Vietnam Investment Review (Weekly) and VIR online vir.com.vn

The Passage Team

The Passage is committed to creating in-depth content over technology industry across Asia with a focus on emerging startups in the technology, healthcare, education, food, tech, travel & mobility segments.

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