Hong Kong’s Cyber Laws Threaten US Tech: Necessary Measure or Overreach?
The new rules proposed by Hong Kong risk driving away Western tech giants. Credit: Anthony Kwan / Getty Images.
Key Takeaways
- Proposed Hong Kong cyber rules will give officials access to US computer systems.
- US tech giants claim the new rules are “unprecedented”.
- The move could drive Western tech giants away from the city.
US tech giants and regulatory bodies have criticized Hong Kong’s proposed cyber rules, which they say grant the government unprecedented access to company computer systems.
One of the proposed investigative powers would allow authorities to connect equipment to privately owned critical computer systems and install applications, including systems outside of Hong Kong.
New Cyber Law Proposal
The proposal states that companies would be forced to notify the government of severe breaches within two hours or face fines of up to HK$5m.
According to officials, the new rules will protect against cyberattacks on critical infrastructure, national security, and the economy.
However, the Asia Internet Coalition, which includes Meta, Amazon and Alphabet’s Google, claims the proposals grant too much power to authorities and could eventually damage customer trust.
The local American Chamber of Commerce (AmCham) and the Hong Kong General Chamber of Commerce also opposed the proposed rules in a public consultation.
“Such unprecedented power directly intervenes in, and could have a significant impact on, a CIO’s operation and could harm the users of the services,” AmCham wrote in a letter on Aug. 1, according to Bloomberg .
CCN reached out to Google, Amazon, and Meta for commentary but did not receive a reply at the time of publishing.
Hong Kong Risks Pushing Western Tech Giants Away
Hong Kong’s position as a gateway to Mainland China and its well-developed infrastructure make it an attractive base for Western tech companies to serve local and regional markets.
Western tech giants like Google, Meta, and Apple have established a strong presence in the city, benefiting from its role as a significant financial and business hub in Asia.
However, their success and operations in the region face increasing challenges, particularly in the wake of political and regulatory changes.
The new rules proposed by Hong Kong risk driving away Western tech giants that have been increasingly attracted to the city following the backlash from COVID-19 restrictions.
US companies are not legally required to provide the US government with direct access to their computer systems to prevent cybercrime.
However, there are various laws such as the Cybersecurity Information Sharing Act of 2015 (CISA) which create obligations for companies to cooperate with the government.
The goal of CISA is similar to that of China’s more intrusive proposal, with the aim of improving overall cybersecurity by facilitating the exchange of information about threats and incidents between private entities and the government.
Cybercrime Growing at an Alarming Rate
Cybercrime continues to pose significant threats to global and national security in 2024. According to Cybersecurity Ventures , the financial toll of cybercrime is projected to reach $9.5trn annually this year.
This represents a substantial increase in cybercrime-related costs compared to previous years, reflecting both the growing sophistication of cybercriminals and the expanding digital landscape.
Ransomware remains a particularly severe threat, with costs expected to exceed $42bn in 2024.
The frequency of ransomware attacks has led many organizations to consider policies for paying ransoms, though this approach comes with significant risks and no guarantees of recovering stolen data.
In Hong Kong, cybercrime incidents have surged throughout 2023 and 2024. According to data released by the Hong Kong Police Force in February , deception cases in 2023 increased by 42.6% to 39,824 total cases.
Internet-based scams cost Hong Kong over HK$9bn, accounting for around 70% of the reports.
The Hong Kong government has continued to acknowledge these threats, and its newly proposed rules mark the most drastic remedy yet.
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