It's not easy for Facebook and Google to 'let go' of the Vietnamese market.

With revenue of up to hundreds of millions of USD, and small tax payments, according to experts, it is not easy for Facebook and Google to give up a fertile, lucrative market like the Vietnamese market.

Recently, information related to the regulation in Clause 4, Article 34 of the draft Law on Cyber ​​Security requiring foreign enterprises providing telecommunications and internet services in Vietnam to set up representative offices and user data management servers in Vietnam has attracted public attention. Many opinions are concerned that Google and Facebook will withdraw from Vietnam and users will be affected by this.

In the National Assembly, delegate Nguyen Viet Dung (Ho Chi Minh City) said that social network providers would find it "difficult to accept". "When operating in 200 markets, does Facebook have to set up servers in 200 countries with a huge management team and costs? Therefore, centralized management is normal, forcing them to set up servers in Vietnam is not feasible. Technically, it is not necessary to set up servers to manage accounts in Vietnam," said Mr. Dung.

Minister of Public Security To Lam did not clearly state his opinion on this incident, but in his role as the drafting agency, Mr. To Lam also assessed the positive effects of information and the internet. Vietnam is in the process of openness and transparency, all citizens must know, be in control of, and have access to information. However, the head of the Ministry of Public Security also said that anything related to national interests, to information safety and security needs to be focused on.

The question is, will the new regulations that may be passed force Facebook and Google to withdraw from the game in Vietnam?

Delicious, hard to give up

Since entering the market with 55 million internet users, Facebook and Google have provided a variety of public information services across the border into Vietnam. Advertising services on Facebook and Google social networks have been very developed, bringing in the main source of revenue; Google has up to 22 advertising services for customers, Facebook has 3 main forms of advertising.

Vietnam has up to 55 million Internet users, many times more than the population of some other countries, is in the top 20 countries with the most Internet applications in the world, and is the 7th country in the total number of countries with the most Facebook users in the world.

Freedom, ease of doing business, no major legal constraints, large number of users, synonymous with high profits. According to economic expert Associate Professor Dr. Ngo Tri Long, advertising revenue in our country's market in 2015 of Facebook was more than 150 million USD, Google was more than 100 million USD, this amount is not taxed. If they withdraw from the Vietnamese market, foreign businesses will lose a profitable market. Other foreign service providers will immediately jump in to replace them.

“From an economic perspective, wherever there are huge profits, businesses will not leave,” Mr. Long affirmed.

Information from domestic telecommunications companies also shows that Google and Facebook are currently renting servers from VNPT and Viettel to improve service quality. VNPT is renting 608 servers to Google, 120 servers to Facebook, Viettel is renting 330 servers to Google and 96 servers to Facebook.

Compared to the profits of hundreds of millions of USD a year, the cost of investing in servers and management costs is not a large expense for foreign enterprises.

Domestic enterprises are at a disadvantage.

In addition, according to many experts, while domestic telecommunications and internet service providers have had to comply with legal regulations and pay business taxes for their operations, foreign telecommunications and internet service providers have not only not paid taxes but also not operated according to the law.

Invisibly, domestic enterprises are having to operate in an unequal environment with foreign enterprises. Without the ability to be technologically autonomous, domestic enterprises cannot develop the market, do not have the conditions to develop alternative services, domestic products will not be able to compete with foreign products.

Some experts are also concerned that personal data is being considered a national asset in the near future. Foreign companies are specifically analyzing, synthesizing and storing it into separate data files, gradually forming a copy simulating real people in the virtual world. This information is no different from a national database on population stored abroad, managed by other countries' governments.

No one guarantees that such information will not be provided to a third party (which could be a country or another organization), to a business for business purposes, to be turned into commercial goods, or to be obtained by terrorist organizations and used for acts that threaten life and property.

According to TNO