US tech firms warn Vietnam’s draft law could limit growth

US tech companies have raised concerns over a proposed data protection law in Vietnam, warning it could restrict their ability to grow in one of Asia’s largest digital markets. The draft law, which is under discussion in Vietnam’s parliament, aims to tighten controls on data protection, limit data transfers abroad, and give authorities easier access to information. Major industry players, represented by the Information Technology Industry Council, argue that these restrictions could hinder companies like Meta, Google, and Equinix from effectively reaching their large Vietnamese user base and building new data centres.

Vietnam, home to 100 million people, is an attractive market for tech and social media companies and has ambitions to expand its data centre industry through foreign investments. However, the new law would require companies to obtain prior authorisation before transferring “core” or “important” data abroad—terms that critics say are vaguely defined. In addition, companies may be required to share data with the government in cases broadly categorised as being in the “public interest.”

The US tech sector has voiced opposition, citing an “undue expansion of government access” that could create significant compliance challenges. The American Chamber of Commerce in Hanoi has joined the call, urging lawmakers to reconsider the legislation’s quick adoption, which is scheduled for a vote on November 30. Industry analysts are watching closely, as the law could impact foreign investment plans, including Google’s potential new data centre in southern Vietnam.