It was reported last week that Google had established an office in Ho Chi Minh City making it one of the first of the big cross-border service providers to do so. This comes five years after the Law on Cybersecurity, which came into force back in 2019, made it a requirement for these firms in order to do business in Vietnam.
Indeed, despite persistent urging by the Vietnamese authorities to open local offices almost no major tech firms have complied. And there is a good reason for this–Vietnam’s laws around censorship are ambiguous and often applied subjectively and this can make compliance challenging and subsequently put these firms at risk of prosecution.
Take, for instance, the Netflix series on MH370 in which, in one episode, it was suggested the Vietnamese government could have done more to assist in the search. The government subjectively assessed this claim to be objectively ‘untrue’ and subsequently ‘demanded’ this content be removed. With this in mind, it can be difficult to know what is and is not acceptable.
Moreover, with respect to publishing unacceptable content, opening local offices can see these firms fined, which the local press, in the case of Netflix at least, has made clear is more than likely.
“Netflix is a serial violator of local laws but has escaped penalties simply because it is not a legal entity in the country,” according to VN Express.
Adding weight to this theory, TikTok did open a local office and was subsequently investigated back in 2023 for allowing the proliferation of ‘toxic’ content. More to the point, however, the Ministry of Information and Communication reportedly admitted it had singled TikTok out because it was the only big tech firm with a local office.
Taking all of this into account, Google, as the parent company of YouTube could be at a significant risk.
That said, it’s not necessarily content where Google might face its biggest challenge but rather in its core business: its advertising.
Indeed, in Vietnam there are not just provisions for prosecuting creators and distributors of content the government doesn’t like but also advertisers who place advertisements on said content.
International advertising agency WPP (GroupM), for example, was fined VND 35 million, in November 2023, for ads for Procter & Gamble and Unilever that it ran on YouTube videos containing ‘illegal content’; it was also fined VND 55 million, back in April, for advertisements placed on a YouTube video featuring China’s nine-dash line; and Inverse Media was fined VND 15 million in May this year for ads for Nestle published on content “distorting, defaming the leaders of the Party and State of Vietnam” also on YouTube.
Indeed, the common denominator in all of these cases is YouTube, which is owned by Google, on whose algorithm these placements have been blamed.
For its part, the Ministry of Information and Communication has provided a workaround whereby it provides a whitelist and a blacklist of sites where ads can and cannot be placed, respectively. These lists, however, are relatively short and it’s not at all clear how they might be utilised by Google in a practical sense. Although, neither is it clear if Google will now be held accountable for these violations moving forward as opposed to the advertising firms, though it’s worth noting that Google has leverage where some other firms do not.
For one, a good deal of its Pixel phone production, through Foxconn, is done in Vietnam.
There are also reports Google is considering opening a local data centre. This would be a coup for Vietnam which has been actively pursuing this exact sort of high-tech investment.
Not only that, but in 2023, the US exported just over US$3 billion in services to Vietnam accounting for about a quarter of its exports to the country. With the impending Trump administration pursuing tariff measures to close US trade surplus gaps and Vietnam and the US having one of the largest, it may be that an increase in service imports might ease some of that pressure.
And of course, there are a myriad of Vietnamese YouTubers collectively making millions of dollars through YouTube supporting Vietnam’s own service exports.
The point being, that there is a lot of math to be done here on both sides with a myriad of risks and rewards all round.
It is, however, only a local office, not a multi-million dollar investment and it’s not like it can’t be undone.
A lot of big international brands and businesses exit the Vietnam market all the time. Equinor and Orsted both closed their local offices this year, likewise, GoJek announced it was shuttering its Vietnam business back in September, and Amazon Prime shut down its pay TV service at the end of 2023.
And on that line of thought, it’s worth remembering that in 2010, Google abandoned its search business in China partly over censorship requirements, so there is precedent for the firm choosing to leave a market rather than acquiesce to the local authorities.
All of that is to say, that in this space there are a lot of moving parts and with this in mind, how this all plays out could offer some valuable insights into how achievable Vietnam’s pursuit of a high-tech future might be and what other foreign tech firms might expect when entering the Vietnam market.