Vietnam eyes greater oversight of social media networks with new regulation

Photo by NordWood Themes on Unsplash

Vietnam is mulling a new regulation requiring social media networks to obtain a licence to operate in the country in a move seen as another attempt by the government to keep foreign players in line.

The proposed licensing, which would allow only authorised social media networks to collect service fees and provide live streaming services, is part of the Ministry of Information and Communications’ (MIC) draft changes to Decree 72/2013 on information distribution over the internet.

The ministry has also proposed that users be only allowed to interact on social media channels after a two-factor authentication. Other proposed changes pertain to censorship norms and differentiation of social network content from journalism.

Per the new draft decree, social media networks comprise personal information pages, online forums, chat rooms, audio/video and image sharing, and other similar services.

MIC is expected to submit the proposed changes to the Prime Minister in the fourth quarter of this year.

“The deployment of accelerating digital growth has exposed legal gaps that need to be filled,” it said in a statement. “Overseas companies such as Facebook and Google, which are having significant impacts on Vietnam’s social life, have not fully complied with Vietnamese laws.”

The watchdog added that a lot of social media businesses provide multiple specialised services such as broadcasting, e-commerce and online education, which makes oversight difficult for government agencies.

Vietnam had 614 social networks at the end of last year. Large networks, defined as those with more than 1 million users, accounted for less than 10 per cent.

Facebook had about 60 million users, while Google’s YouTube had 35 million, according to the ministry.

“If they do not fully comply with the licensing norms, they might lose these significant audiences,” said Ha Trung Kien, founder and CEO of Facebook’s local rival Gapo.

In addition, Vietnamese users are a large audience for other markets such as the US and South Korea. As a result, failing to conform to the country’s laws will affect global firms’ operations in other territories, Kien opined.

DealStreetAsia reached out to Facebook and Google spokespersons for comment but did not receive a response.

While the licensing proposal might not have a significant impact on the local revenues of major overseas companies, these firms may have to pay higher taxes to the local government, said Vietnamese startup advisor Nguyen Viet Hung.

“The government is only receiving withholding tax from such services. With a business registered within Vietnam’s jurisdiction and an office opened here, the country will be able to collect more tax incomes,” he said.

“Revenue is mostly driven by market demand, unless Vietnam applies a strict ban like China,” he added.

Hung said that big foreign companies should start focusing on strengthening their government relations teams.

Vietnam’s foreign ministry has previously said companies such as Facebook should abide by local laws and fully implement their tax and social responsibilities, according to a Reuters report.

The report said Facebook’s local servers in Vietnam were taken offline in mid-February, slowing local traffic to a crawl until the social network giant agreed to significantly increase the censorship of “anti-state” posts for local users in the country. Reuters said Facebook “had reluctantly complied” with the government’s request.

With about 70 per cent internet penetration and one of the fastest salary increase rates in the world, Vietnam is a lucrative market for social networks that earn revenues through advertising.

Online advertising revenue in Vietnam reached $550 million in 2018, 70 per cent of which went to Facebook and Google, according to research by Vietnam-based advertising big data startup Ants.

Gapo’s Kien estimated the total digital ads market could reach $700 million this year.

Lured by the promise of the market, homegrown social media companies such as Gapo and Lotus started offering their services last year. Kien claimed that Gapo has about 4 million active users. Lotus, launched in September 2019, managed to gain 1 million active users by November, according to MIC.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.

Singapore Reporter/s

In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

Following vacancies can be applied for (only in Singapore).   

  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.