* Internet firms battle plan to require local data, local offices
* Political activists face even tougher online policing
* Facebook, Google blocking more content as pressure ramps up
* Social media widely used, government seeks economic benefits
By Mai Nguyen and Jonathan Weber
HANOI/SINGAPORE May 18 (Reuters) - A struggle over internet laws in Vietnam is pitting a government keen on maintaining tight control against U.S. technology companies trying to fight off onerous new rules - with the country's online dissidents among the biggest losers.
The latest conflict centres on new cybersecurity legislation set for a vote by Vietnamese lawmakers later this month. It aims to impose new legal requirements on internet companies, and hardens policing of online dissent.
Facebook, Google and other global companies are pushing back hard against provisions that would require them to store data on Vietnamese users locally and open offices in the country. But they have not taken the same tough stance on parts of the proposed law that would bolster the government's crackdown on online political activism.
Vietnam offers a case study in the conflicting pressures the likes of Facebook and Google confront when operating in countries with repressive governments. It also shows how authoritarian regimes try to walk a line in controlling online information and suppressing political activism without crippling the digital economy.
Such tensions are playing out across Southeast Asia, where the enormous popularity of Facebook and Google has created lucrative business opportunities and outlets for political dissent. With that, though, has come both government censorship and a way to get propaganda to large audiences efficiently.
The region is particularly important for Facebook and Google because most Internet users in China are blocked from accessing them.
An industry group called the Asia Internet Coalition (AIC) is leading efforts to soften the proposed cyber law in Vietnam. Jeff Paine, managing director of the AIC, said he and others were able to raise concerns about the law directly with Vietnamese Prime Minister Nguyen Xuan Phuc and other top government officials when they visited Singapore last month.
The discussions took place as part of a seminar about internet issues that included academics, industry officials and the high-level Vietnamese delegation, according to Paine. He said there was "a healthy dialogue" that focused mostly on how Vietnam can leverage the next stages of the digital revolution.
But he said there was no discussion of content restrictions.
The Vietnamese government did not respond to a request from Reuters for comment for this article.
Political activists in Vietnam rely on social media to rally support, and the new cyber law comes on the heels of an April letter from more than 50 rights groups and activists to Facebook Chief Executive Mark Zuckerberg accusing the company of working too closely with the Vietnamese government to stifle dissent.
Facebook and Google say they have to abide by local laws in the countries where they operate.
Facebook's latest "transparency report," released Tuesday, shows that in the second half of last year, the company began blocking content in Vietnam for violations of local law for the first time. The company reported 22 such instances - though it said they were prompted by "private reports of defamation" rather than direct government requests.
Google last year also blocked YouTube videos at the request of the government for the first time. Updated figures released Friday show the company was asked to remove more than 6500 videos in 2017, mostly for criticizing the government, and that it complied with a majority of the requests.
The transparency reports do show that the companies don't automatically do the bidding of the government. Facebook said it had received 12 government requests for Facebook user account data in 2017 and complied with only 4 of them, all of which were "emergency" requests. The company defines an emergency as involving "imminent risk of serious physical injury or death."
In cases where content is alleged to violate local law, both companies say takedown requests are subject to legal review, and when they comply the material is only blocked locally.
Direct government censorship requests don't tell the whole story though.
Facebook also removes content and blocks accounts for violating its own global "community standards," which bar material and behaviours ranging from posting pornography to hate speech and inciting violence.
"The first thing we do when a government tells us about content that violates laws is we look at whether it violates our standards," said Monika Bickert, Facebook's vice president of global policy management. The company this week began providing data on community standards violations but does not break it down by country.
"My account was blocked for 8 months," said Le Van Dung, an independent journalist in Vietnam who signed the letter to Zuckerberg. "I sent letters to Facebook management for months but there's only an automatic reply saying they have completed your request."
His account was restored last month, the day after the appeal to Zuckerberg was sent, he said.
Facebook said Dung's account was correctly removed for violating community standards provisions barring "spam" activities and was restored by mistake. Dung denies engaging in spam. He did, though, have more than one account. Multiple accounts are not allowed on Facebook and fall within the company's definition of spam behaviour.
Vietnam has had tough internet regulations in place since 2013. They ban any postings that are anti-government, harm national security, cause "hatred and conflicts" or "hurt the prestige of organizations and individuals."
The rules also ban social media users who "spread fake or untruthful information."
New rules implemented in 2017 tightened the screws further. One turning point, according to Yee Chung Seck, an attorney in the Ho Chi Minh City office of the international law firm Baker McKenzie, was an April 2017 meeting convened by the government to discuss a range of Internet ills including disinformation, hate speech and bullying.
That came just after the government called on all companies doing business in the country to stop advertising on YouTube, Facebook and other social media until they found a way to halt the publication of "toxic" anti-government information.
Yet another decree implemented last month stated that social media platforms had to remove illegal content within three hours of it being reported by the government, though Paine said the rule applies only to domestic companies.
Still, Facebook and Google don’t seem to be under any imminent threat given how deeply they have penetrated into Vietnam society.
About 55 million of Vietnam's 96 million people are regular social media users, according to research by Simon Kemp, a digital media consultant based in Singapore.
Facebook, YouTube and Google Search are far and away the most popular internet destinations, Kemp's data shows. Facebook is also the most popular platform for online shopping in Vietnam.
And the government is eager to nurture the country’s digital economy: smartphones and all that they enable, especially e-commerce and online banking, are transforming economies across Asia, and no one wants to be left behind.
"They love that part of the story," said Chung.
But the government also wants more control, including local data storage and local corporate offices - a provision company officials privately fear is designed to allow the government to intimidate companies by exposing individuals to arrest.
Both Facebook and Google serve Vietnam from their regional headquarters in Singapore.
The new law also gives more power to Vietnam's Ministry of Public Security, which is tasked with crushing dissent in the communist-ruled country.
Facebook said it expected the new rules would require it to restrict more content. Google declined to comment.
For the rights activists, there appears to be little hope of relief.
For example, just this month, a Facebook user in Vietnam was sentenced to four-and-a-half years in jail for posts which "distorted the political situation," according to a statement posted on an official Communist Party website.
Still, Facebook remains an important tool for activists in Vietnam - a country where government criticism is rarely tolerated and the battle between the authorities and dissidents is a game of cat-and-mouse.
"Sometimes we use Facebook to distract authorities, like we pretend to discuss an important meeting, which obviously won't happen," activist Nguyen Lan Thang said. "Then we watch from afar and laugh as they surround our fake meeting spot," Thang added. (Additional reporting by James Pearson Editing by Martin Howell)