RFID: Is big brother watching?

Growing support for RFID (radio frequency identification) tagging among technology vendors and retailers is creating both conveniences for consumers and new threats to their privacy.

At least that was the consensus among a panel of experts speaking Friday at the Cebit trade show in Hanover, Germany, after a sometimes heated debate on the pros and cons of the technology.

RFID tags are similar to bar codes in that they contain data and require a transmitter gun to collect it, but they can store more information than bar codes. Retailers like Wal-Mart Stores Inc. have been eager to adopt the technology because it can help them track inventory and buying information. However, privacy advocates fear that the tags can be left "active" after a sale, and the data stored will continue to be accessible. What's more, RFID tags placed in store loyalty cards, for example, could be used to profile consumers' shopping patterns.

"I can't really see the positive aspects of RFID for consumers and citizens," said Rena Tangens, founder and board member of the German privacy group FoeBuD e.V.

Tangens argued that it is easy to covertly place RFID tags in products without consumers knowing. Transmitter guns could then theoretically access information about consumers stored in the tags. Her group, which gives out an annual tongue-in-cheek Big Brother Award to companies that they deem as privacy violators, is calling for new legislation and technologies to protect consumers from the mishandling of RFID technology.

However, Philip Calderon, The ePC Group Ltd.'s vice president in Europe, downplayed Tangens' concerns, saying "there are more myths in RFID than there are in Greek mythology." Calderon has worked with retailers as well as industry players on RFID standards. He believes that RFID can offer great advantages to consumers and that the privacy concerns can be solved through the development of new technologies.

"I believe there is a place for legislation, but not if it holds back new technologies until it is put in to place," Calderon said. "Companies shouldn't have to wait five or six years until the privacy issues are dealt with."

There are reasons why consumers would benefit from having RFID tags left active after a purchase, such as the ability to return goods without a receipt or send an item back without filling out a warranty card, Calderon said. All their purchase information would already be stored in the product's tag, eliminating the need for paper proofs of purchase.

Art Coviello, president and chief executive officer of RSA Security Inc., agreed that RFID offers advantages to consumers, but said that he "would be very worried of his privacy." RSA just launched an RFID tag blocker, in fact, that prevents readers from performing unwanted scanning of products or goods.

Coviello said that he also supports legislation, but not if its keeps companies from deploying RFID because the ramifications -- positive or negative -- cannot be known until it is in practice.

"The fundamental thing about technology is that there needs to be cooperation as never before between governments, consumers and vendors," he said. "Consumers cannot be passive. They have to state their rights and how they wanted to be protected."

However, consumers may not yet know all the potential privacy concerns related to RFID, the panel members said.

One headline-grabbing case of supermarket chain Tesco PLC using RFID tags as a kind of antitheft system has caught the attention of some, at least. The store tried to cut down on theft of high-price items by attaching RFID tags to them and when consumers pulled the items off the shelf, the in-store security cameras were triggered. Some images were destroyed if the item was purchased while others were saved to potentially identify thieves.

Many shoppers became incensed when they were made aware of the program. Calderon and other RFID advocates said that Tesco's use of the technology is exceptional, however.

"There have been some mistakes made but the potential of RFID is huge," Calderon said.

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