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Summer has come and gone, but the waves of digital laws in Vietnam remain. The Ministry of Science and Technology recently introduced the draft Law on Digital Transformation to materialize the Political Bureau's 2024 Resolution 57, aiming to remove administrative barriers and unlock the nation's potential for technological breakthroughs.
The draft introduces a framework for local political and state agencies to embrace artificial intelligence technology advancements in daily operations and introduces incentivizing policies to boost the economy.
Through the draft law, the MST, now headed by the former minister of information and communications, intends to regulate digital activities in a broad way, spanning all activities in the digital economy and society and covering all digital platforms.
New regime for digital platforms
Vietnam's digital platform regulations are scattered in various laws, notably the Law on Digital Technology Industry, the Personal Data Protection Law, the Law on Data, the Law on Electronic Transactions, the Law on Protection of Consumers' Rights, and the Cybersecurity Law, each of which is overseen by a different regulator. Several are recently enacted, either as a completely new law or updated one, while others are expected to be amended soon.
Despite this, the draft Law on Digital Transformation proposes a far-reaching paradigm for digital platforms, covering specialized digital platforms, intermediary digital platforms, dominant platforms, shared digital platforms in political system agencies, and others.
While specialized platforms would support generic standard monitoring and reporting obligations, the draft proposes comprehensive obligations for intermediary platforms and dominant ones. In particular, intermediary platforms would be required to give prior notice of any changes to their terms and conditions and for service suspension or termination, as well as to give descriptions of recommender systems and proactively censor and remove illegal content.
Additional obligations for dominant platforms
Dominant platforms are defined as those with a user base surpassing 10% of the country's population — more than 101 million as of 2024 — or those deemed dominant under competition law. They would face more business-intrusive requirements, seemingly inspired by the EU Digital Services Act and Digital Markets Act, targeting "gatekeepers."
Such platforms must promote fair competition by avoiding the use of platform business data for direct competition, and refraining from imposing unreasonable obstacles, restrictions or priorities that disadvantage participating organizations and individuals, among others.
They would also be required to guarantee users' rights to safely and freely transfer personal data, access essential data and services, obtain data from business operations, and receive transparency on algorithmic criteria and principles, while enabling connectivity and interoperability with other platforms and allowing choices in pre-installed applications.
Additionally, these platforms must submit periodic and ad hoc reports on operations, revenue, data and algorithms, undergo independent audits when requested, comply with monitoring and inspections by authorities, and provide accurate, timely information to support assessments of competitive impacts and consumer protection.
AI-related and data privacy provisions
The draft contains a ban on creating or editing content — text, image, audio, video — using AI without clearly disclosing that AI was involved when such use may cause confusion, or using AI for fraudulent purposes. Like most prohibitive provisions under Vietnamese law, terms like "confusion" remain undefined, leaving room for interpretation and potential enforcement challenges.
The ban is not the only out-of-the-blue requirement under the draft, as it also broadly requires all digital organizations to design and provide services in accordance with the principles of "safety by design" and "ethics-by-design." It remains unclear whether lawmakers intend to elaborate these cybersecurity and AI standards in newer versions or under a decree of the government that will be drafted and issued after the law is passed.
Citizens would have the right to data portability and to choose or refuse to interact with algorithmic and AI systems. They would also be able to request explanations and human intervention for automated decisions affecting their legitimate rights and interests, similar to the right under Article 22 of the EU General Data Protection Regulation.
Interestingly, in late August, the government instructed the MST to draft the Law on Artificial Intelligence. This could potentially lead to removal of AI-related provisions in the digital transformation draft to avoid overlap with the new AI law.
Coexistence with other legislation
The draft Law on Digital Transformation contains a provision saying previously issued laws will prevail when there is a conflict on an issue. There are no obvious conflicting rules now, however. The law appears to provide some provisions supplementing existing laws, particularly the PDPL, as seen with the right to data portability and the right not to be subject to automated decision-making.
Stakeholders' concerns
It is understandable digital platform operators are concerned as the Digital Transformation Law would add yet another layer of rules to navigate. Operation-wise, more obligations require more compliance efforts, especially for big players.
Digital platform operators are concerned the law's adoption may complicate the current legal system, considering the fresh AI and data protection regulations under the Law on Digital Technology Industry, PDPL and Law on Data, among others. Some would advocate the country prioritize the public sector's digital transformation while introducing more enabling policies for the private sector, rather than imposing further regulatory constraints at this stage.
As the country aims high to master strategic technologies in a short timeframe, local lawmakers also seem to be rushing the legislative process. The MST aims to pass the Digital Transformation Law inOctober 2025, with it taking effect 1 Jan. 2026.
While appraisal by the Ministry of Justice normally takes place after public consultation, a revised version of the draft law was submitted to the MOJ three weeks before the MST's 11 Sept. public comment deadline.
The time skip brings uncertainties not only for platforms but also practitioners. Given the current pace, there are concerns lawmakers will hear and address concerns, not only for this draft law but others in the future.
Relevant stakeholders should be closely tracking the drafting progress and expect more revisions to the draft to come, as the window for input and reaching lawmakers is narrowing fast.
Huu-Tuan Nguyen, CIPP/E, is a special counsel at BMVN International and Alex Do, CIPP/E, is an IPTech executive cum patent coordinator at BMVN International, in alliance with Baker McKenzie Vietnam.
