Many tech companies from the U.S. have raised concerns over Vietnam’s new law to strengthen data protection and limit data transfers overseas, saying it would hinder the growth of social media platforms and data center business.
Vietnam is among the world’s largest markets for online platforms and is rushing to expand its data center industry with foreign investment.
Jason Oxman, chairman of the Information Technology Industry Council (ITI), said that the draft law will make it more difficult for tech companies to reach customers’ data. ITI is a trade association represented by leading tech companies like Meta, Google, and Equinix.
For Vietnam’s government, the draft law would give the authorities easy access to information. According to Vietnamese and foreign officials, the law itself was pushed by the Ministry of Security.
The draft law is currently being discussed in Vietnam’s parliament and is scheduled to pass on Nov.30 if the draft is eligible, although the date is still subject to changes.
Vietnam already has a regulation limiting cross-border data transfer, however, the laws are rarely enforced.
The potential impact of the implementation of the law is still being debated, as tech giant Google has already considered building a large data center in southern Vietnam before the law was even presented to the parliament.
Meanwhile, Thailand, another upcoming player in the Southeast Asia data center market, has recently seen investment from big tech companies such as Google and GDS in two new hyperscale data centers worth over THB 60 billion.
As Vietnam continues its stranglehold on the flow of data, Thailand with more relaxed regulation and friendly incentive to investors, may serve as a more attractive option for future data center investment in the region.
Other big name have recently announced their investment decision in Thailand, such as Amazon, Microsoft, Nvidia and UAE’s DAMAC.
