Vietnam moves to crack down on Netflix, which 'violates' content and tax laws

New regulations are being drawn up in Vietnam in a bid to force international TV platforms such as Netflix to comply with local content and tax laws, Vietnam's information minister revealed Tuesday (November 10).

Nguyen Manh Hung, minister of information and communications, said at a government hearing that platforms like Netflix "violate the laws of Vietnam" by paying no tax and flouting content regulations, creating "unfair competition" for local TV players.

Hung claimed that international streaming platforms have combined revenues of nearly 1 trillion dong (US$43 million) from 1 million subscribers in Vietnam, according to the ministry's calculations. But they have "no taxation". 

By comparison, local pay-TV providers have a combined 14 million subscribers and revenues of around 9 trillion dong (US$389 million), the ministry claims. But domestic radio and TV services "have to comply with the regulations on licensing, editing content, paying tax", Hung pointed out.

What's more, international platforms "will grow strongly in 2020", with Netflix subscribers increasing by 60% in the first quarter of 2020 compared to the prior year, Hung said. In parallel, the number of traditional TV subscribers reduced by 1 million in the first quarter, the minister claimed.

Hung also pointed out that Netflix has flouted Vietnamese content regulations related to the history and sovereignty of the country, violence, drug use and sex.

"Netflix does have a lot of content that violates the laws of Vietnam. Specifically, misrepresenting history such as the The Vietnam War series, distorting about Vietnam's territorial sovereignty, or the movie Madam Secretary, which contains violence, drug use and pornography," Hung said.

Hung said the information ministry, finance ministry and tax department were working together to submit proposed amendments to laws so that "cross-border platforms" fall under Vietnamese tax and content regulations.

A Netflix spokesperson told Campaign Asia-Pacific that it "complies with applicable laws" and would support regulation requiring it to pay local tax.

"We are supportive of the implementation of a mechanism that will make it possible for foreign service providers like Netflix to collect and remit taxes in Vietnam, however today such a mechanism does not exist," the company spokesperson said. "We continue to engage constructively with the tax authorities as they implement this mechanism."

Regarding content regulation, Netflix said its policy on removing titles "remains unchanged". 

"With regards to the content available on our service, as we have previously disclosed in our ESG Report, in a rare number of cases around the world, we’ve removed titles or episodes of titles from specific country catalogues in response to formal written legal requests from the government, including Vietnam," the spokesperson said.

"This has remained unchanged for us since launching in Vietnam and will continue to be the case going forward. As with tax policy, Netflix and our industry continue to engage with the government on potential regulations on VOD services accessible in Vietnam."

Netflix disclosed a full list of titles it removed due to government takedown demands in a new report, called Environmental Social Governance, published in February. At the time, the platform had only removed nine titles in its 23-year history due to government demands. Five of the removals occured in Singapore, while one was in Vietnam—the film Full Metal Jacket, which it pulled from Vietnam in 2017.