Market Overview

Facebook Bowed Down To Vietnamese Censorship After Local Servers Brought Down: Reuters

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Facebook Inc.’s (NASDAQ: FB) local servers were brought down earlier in the year, which led the social media giant to agree to Hanoi’s censorship demands.

What Happened

Vietnamese state-owned telecom companies brought down Facebook servers for seven weeks starting in February, resulting in outages for one of the company’s largest markets in Asia.

"We believe the action was taken to place significant pressure on us to increase our compliance with legal takedown orders when it comes to content that our users in Vietnam see," an unnamed source told Reuters

Facebook emailed a statement to Reuters confirming it had complied with the requests of the Vietnamese government. 

"Once we committed to restricting more content, then after that, the servers were turned back online by the telecommunications operators," another source revealed. 

Why It Matters

According to Ken Research, a publisher of market intelligence reports, online advertising spending in Vietnam is expected to reach $1.7 billion by 2023. The major online ad platforms are Facebook and Alphabet Inc.'s (NASDAQ: GOOGL) (NASDAQ: GOOG) Google. The Vietnamese government has yet to write into law any stringent rules on online advertising.

Vietnam’s ruling Communist Party keeps a tight grip on media and does not tolerate dissent. At least 16 people were arrested, detained or convicted for posting anti-state content after Vietnam alleged that Facebook violated its cybersecurity law by allowing users to post anti-government comments, reported Reuters.

The cybersecurity law mandates companies set up local offices and store data in Vietnam, although Facebook has said that it does not store data locally in Vietnam.

State media attributed the Facebook slowdown in Vietnam to undersea cable maintenance, leading to telecom firms in the country issuing apologies.

 

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