Malaysia's Social Media Licensing Plan Faces Backlash from Tech Giants

Malaysia's proposed social media licensing regime faces criticism from tech giants. Asia Internet Coalition expresses concerns over lack of industry consultation and regulatory uncertainties. New regulations to require social media platforms with over 8 million users to obtain annual operating license.

Credit: Reuters

The Asia Internet Coalition (AIC), representing tech giants like Google, Meta (Facebook owner), and X, penned a letter to Prime Minister Anwar Ibrahim, highlighting worries about the lack of industry input and regulatory uncertainties.

The new legislation, which will go into effect on January 1, 2025, after a five-month grace period, are intended to improve online monitoring in the face of mounting concerns about online fraud, cyberbullying, and child safety. The future framework requires social media and messaging companies with more than 8 million users to obtain an annual operation permission, with penalties of up to 500,000 ringgit (US$115,000) for noncompliance.

The AIC warned that these regulations could stifle innovation, discourage foreign investment, and burden businesses with compliance burdens. They cited the lack of prior public consultations prior to the issuance of the government's Information Paper and FAQs on August 1, which left businesses unsure about their responsibilities under the new guidelines.

In response, a Communications Minister's office official denied the allegations, claiming that significant parties such as Meta and Google had been actively involved and consulted since the beginning of discussions. The official stressed that these IT titans were advised of the essential processes from the start.

However, the AIC expressed particular concerns, such as the need for social media platforms to obtain a local licence, hold service providers accountable for user-generated content, and impose rigorous content moderation requirements. The Department of Islamic Development Malaysia's mandate for pre-approval of religious content, as well as the possibility of broad content removal requests with unreasonable timelines, were particularly concerning.

The AIC also opposed the necessity for these platforms to form a locally incorporated firm, claiming that it would hinder foreign investment and reduce Malaysia's global competitiveness. Communications Minister Fahmi Fadzil confirmed that the government will not postpone the regulation, stating that these sites must follow the regulatory framework to provide a safer online environment for Malaysians.

Fahmi said, "Yes, they are Big Tech, but our laws are bigger. If they want to operate in Malaysia, they must respect and comply with our laws," he said, expressing his openness to discuss the matter with interested parties. Grab, Southeast Asia's top ride-hailing business and an AIC member, distanced itself from the coalition's stance, stating that it had not been told or consulted about the open letter.

Grab said that the proposed regulation had no influence on its operations and declined to comment on the topic, reaffirming its commitment to working with the government.

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• Malaysia's proposed social media licensing regime faces criticism from tech giants

• Asia Internet Coalition expresses concerns over lack of industry consultation and regulatory uncertainties

• New regulations to require social media platforms with over 8 million users to obtain annual operating license

Source: NIKKEI ASIA