Vietnam startup community concerned as criminalization of unlicensed online service looms
Vietnam’s new penal code planned to take effect next month includes some new rules that will send app developers, even household names like Flappy Bird developer Nguyen Ha Dong, into legal troubles.
According to Article 292 of the 2015 Penal Code, providing unlicensed services on the Internet or through mobile networks will be deemed a criminal offense.
Such regulation does not exist in the current 1999 Penal Code, set to be replaced on July 1.
Pham Cong Ut, a Ho Chi Minh City-based lawyer, told newswire Tri Thuc Tre that Article 292 was prepared to accommodate several existing government decrees, and was added to the penal code to better manage online and mobile service sectors.
According to Government Decree No.72/2013, an Internet- or mobile-based service, such as an online game, is considered lawful only when the provider is a legally registered business. Essentially, this means no individual is allowed to publish their own digital services.
As for Article 292 of the 2015 Penal Code, any unlicensed provider of Internet- or mobile-based services who generates profits between VND50 million (US$2,232) and VND200 million ($8,929), or revenue between VND500 million ($22,321) and VND2 billion ($89,286), will be fined from VND200 million to VND500 million, or a suspended sentence of up to two years.
Such regulations could be a nightmare for the startup community, particularly self-employed app and game developers, who are not likely to get a license to provide services on Internet and mobile platforms, as the current procedure is perceived to be rather complicated.
According to decree No.72/2013, a game provider, required to be a company rather than an individual, must prove they have adequate financial capacity and digital infrastructure.
Their game content and script must also be approved as part of the licensing paperwork.
Case study: Flappy Bird
As the effective date of the new penal code is drawing near, attention is now paid to Nguyen Ha Dong, the Hanoi-based app developer that rose to fame with his addictive Flappy Bird mobile game in 2014.
While it is not clear if Dong, who pulled the game from all online platforms in February 2014, may face problems from the new penal code, the success he had with Flappy Bird is still considered an interesting case study.
The 31-year-old game developer published the viral app in markets for iOS and Android on his own, reportedly raking in $50,000 a day from in-app advertisements and sales.
The father of Flappy Bird breached both requirements of Article 292, lacking a license and surpassing the income threshold to be criminally punished.
“Dong could be criminally charged for making illicit profits without a license,” lawyer Ut told Tri Thuc Tre.
The lawyer said Article 292 is not meant to discourage creativity and innovation in technology, rather the article is intended to highlight that an app that can bring more than VND50 million to its creator is no longer considered non-profit, and therefore must be licensed to remain operational, he explained.
“Nguyen Ha Dong should get a license to avoid any criminal investigation,” he advised.
It is worth noting that Dong is still making other games, such as the low-profile Swing Copters, through his .GEARS studio.
In the meantime, lawyer Le Thiep has a different view, saying the Flappy Bird creator is merely an app developer, not a service provider.
“Dong does not have to obtain any license, something he must do only when he commercially trades his apps,” Thiep said.
Tuoi Tre News - June 17, 2016