Privacy advocates and some lawmakers are pushing a debate over potential privacy abuses from the growing use of radio frequency identification chips as huge retailers such as Wal-Mart Stores move toward large-scale use of the technology.
While several privacy groups have raised concerns about the potential uses of radio frequency identification (RFID) chips, the US Congress hasn’t yet drafted legislation to regulate their use. But the Utah and California legislatures have both considered RFID privacy legislation this year, and the US Federal Trade Commission (FTC) has scheduled a workshop on the uses of RFID and the effect on consumers for June 21. The FTC is asking for written comments about the uses of RFID; the deadline to submit those comments is July 9.
RFID uses small computer chips and antennas that are integrated into a paper or plastic label. Those chips can then be read by an electronic scanner, and unlike barcodes, RFID chips withstand dirt and scratches and can be scanned from distances upward of 750cm.
Privacy advocates worry that the technology will allow other uses, such as real-time tracking of customers in stores, or even after they leave stores. Privacy advocates see the potential for retailers and other companies to be able to track consumers long after a consumer purchases an item — or example, a tennis shoe manufacturer scanning a sporting event for the number of people wearing its product.
Those advantages are why large retailers such as Wal-Mart and Target, as well as government agencies such as the US Department of Defense (DOD), are embracing RFID technology as a way to improve their supply-chain efficiency. Wal-Mart, which is leading the way on adoption, plans to phase in use of RFID, with major suppliers of its north Texas stores required to use chips on pallets and cases by January 2005. The DOD plans to require suppliers to use RFID tags by early 2005.
But early experiments with RFID haven’t gone smoothly, at least in the public relations arena. In early 2003, Wal-Mart and The Procter & Gamble Company tested the use of RFID chips on individual packages of lipstick in an Oklahoma store, and the supposedly secret test raised the hackles of privacy advocates everywhere. The RFID chips allowed Wal-Mart to track the customers as they took the lipstick off shelves.
Wal-Mart’s test of RFID chips on individual products also prompted Senator Patrick Leahy, to suggest that federal legislation may be necessary at some point. He criticised what he called Wal-Mart’s “clandestine” testing of RFID.
Speaking at Georgetown University in March, Leahy praised the potential of RFID, but also suggested a federal law may be needed before privacy intrusions reached the point of behaviour that is absurdly out of bounds.
“The RFID train is beginning to leave the station, and now is the right time to begin a national discussion about where, if at all, any lines will be drawn to protect privacy rights,” Leahy said.
But Wal-Mart said its RFID tests had been less clandestine than critics claim.
Customers in the Oklahoma store where RFID chips were tested on lipstick were notified with signs on the shelves, a Wal-Mart spokesperson, Gus Whitcomb, said.
After the lipstick test, Wal-Mart decided to focus on the store-room uses on RFID. In the Dallas area, where Wal-Mart’s first large scale implementation of RFID was scheduled to go live in early 2005, the retailer had talked repeatedly to the media about its plans to use RFID chips, Whitcomb said.
The retailer would use “passive” RFID chips, which required an RFID reader device to transmit information, and chips would be placed on cases and pallets, not most individual items, he said.
In the cases where large items were shipped with RFID chips, customers would be notified about the chips, Whitcomb said
Asked about concerns that customers picking up individual products could be tracked with RFID chips, Whitcomb downplayed those fears.
“That’s all a big hypothetical that we’re not planning to do in the first place,” he said. “We have tried to address the major concerns of privacy advocates.”
So far, retailers and other RFID users have time to work out privacy concerns with critics. While Congress has introduced several technology-related privacy bills in the past year, none deal specifically with RFID chips. A Leahy spokesperson said he had heard of no effort to introduce legislation focusing on RFID and privacy.
In November, a group of privacy advocates, including the American Civil Liberties Union and the Electronic Frontier Foundation (EFF), issued a position statement on the use RFID in consumer products.
The statement called for retailers to give notice to consumers when RFID chips are being used, what the purpose is and to have security measures in place verified by third parties.
The statement calls on merchants to voluntarily comply with RFID privacy measures, and asks retailers to comply with a moratorium on item-level use of RFID chips until a technology assessment involving consumers and other stakeholders can be completed.
It asked retailers not to force consumers to buy products with RFID tags and advocated that consumers should be able to remove or disable the tags, but the statement did not advocate federal legislation.
Notifying consumers was a start, but notice alone was not enough, said Ari Schwartz, associate director of the Center for Democracy and Technology (CDT), one of the groups signing on to the November privacy statement.
“There has to be a way to kill these chips,” he said.
The CDT and other privacy groups had brought their concerns to retailers and RFID vendors, and so far, the two sides were making progress, Schwartz said.
Most retail uses of RFID so far were limited to stock rooms, and with retailers and vendors open to privacy discussion, he didn’t yet see the need for federal legislation.
“The question is really what it’s used for and how it’s done, rather than the technology itself,” Schwartz said. “Most of the benefit out there comes on the back end, in the stockroom, and most of the privacy concerns come when it leaves the stockroom.”
Despite the lack of calls for federal legislation, RFID vendors aren’t keeping quiet in Washington, DC. In late April, Royal Philips Electronics hosted a forum on RFID at the National Press Club.
Philips, which has shipped more than a billion RFID tags, saw a potential for the technology in the stockroom rather than on individual products, president and chief executive officer of Philips Semiconductors, Scott McGregor, said.
Currently, RFID chips cost between US$0.20 and $US1 each, making them too costly to use on many consumer products, McGregor said.
But some privacy advocates question if there’s been enough of a debate about the uses of RFID as government agencies and retailers move toward large-scale RFID adoption.
Senior staff attorney with the Electronic Frontier Foundation, Lee Tien, decried a move toward what he called a “world of surveillance” during the Philips forum on RFID.
“There are a lot of ways the government is looking to use RFIDs, but it’s not clear that we’ve had any kind of discussion in Congress,” Tien said.