))) Privacy Debate Homes In
On Radio I.D. Tags

RFID Getting Personal

James Detar
May 24, 2004

Privacy Debate Homes In On Radio I.D. Tags - RFID Getting Personal - Critics starting to worry about the power of radio frequency identification.

In the Sci-Fi movie thriller "Minority Report," actor Tom Cruise's character is pitched products in a most unusual way as he walks through a shopping mall.

A machine scans the retina in his eye. Then it checks his profile against a database. It looks at his preferences, and a cyber image of a person on a video screen calls out to him by name, imploring him to buy certain items.

Unreal, you say? Not exactly. Today's radio frequency identification, or RFID, devices could pose a somewhat similar threat to privacy, some say.

And though there surely would be a huge public outcry if any company tried to use RFID in such a way, the privacy issue associated with use of RFID is getting much attention these days.

"There's a lot we don't know about these things," said Lee Tien, an attorney for the Electronic Frontier Foundation, a Web privacy advocate.

Industry officials say RFID devices could soon come into wide use for tracking inventory, paying for goods and other uses. Sales of RFID chips and gear are expected to rise to $8 billion in 2008 from a little more than $1 billion in 2003, analysts say.

And the thought of all those radio chips out there identifying things scares privacy advocates.

Similar To GPS

RFID is a member of a class of locating and tracking technology that also includes global positioning system, or GPS, devices.

"Common to them is they make it a lot cheaper and easier to figure out who people are, and where they are," Tien said. "And companies that make them haven't been paying much attention to privacy issues."

Ten years down the road, people might realize some basic privacy safeguards are gone as a result of all these RFID devices, he says. But then it might be too late.

Retailers, though, point to the benefits of RFID. There are many big pluses, says Richard Varn, a technology adviser for the National Retail Federation, former Iowa state senator and former chief information officer for that state.

"When people talk about far-out scenarios, I wish they would look at the technology and have some sense of what's practical," Varn said.

Today's RFIDs can't hold much data. Future ones will almost surely have safeguards to protect privacy. So, he says, the danger of privacy invasion is in the future, and it's slight.

Varn and Tien agree on one thing; it's early in the game. "We're quite a ways," said Varn, "from knowing how the system will work."

RFID only recently has been gaining steam, but the tiny radio chips that power RFIDs have been around since the 1940s.

An RFID system has three parts. There is an RFID chip. It's attached to a holder, or "tag," that can itself be attached to, say, a shirt or a pallet of goods. And there is a chip reader. The chips sell for about 25 cents each today, too expensive for wide use. But analysts expect prices to keep falling. Among the biggest chipmakers targeting this market are Texas Instruments, Philips Semiconductors, Atmel and EM-Marin, a unit of Swiss watchmaker Swatch. Recent developments include Wal-Mart's mandate to its top 100 suppliers to start using RFID tags on cases and pallets of goods by January 2005. It's a low-cost and reliable way to track inventory, the company says.

For its fiscal year ended Jan. 31, the world's biggest retailer sold more than $256 billion in goods, but low inventory of some goods cost it some sales. If RFID tags help it boost sales just 1% - definitely doable, says researcher Venture Development - that's $2.5 billion in new sales.

The tags companies sell today must comply with a new standard that came out in November from EPCglobal, a standards body. The group includes Procter & Gamble, Wal-Mart and IBM. But that standards group hasn't yet had time to address privacy issues.

Yes, more uses of RFID pop up every day, says Philips Semiconductors Chief Executive Scott McGregor. But that shouldn't pose a privacy problem, he says.

"They range from tire pressure gauges to bus tickets to pallet labels, animal I.D. tags and other things," McGregor said. "The key thing is to focus on getting consent from consumers, so they are always aware of what is happening."

FTC Workshop June 21

McGregor says people fear the perception of a lack of privacy, not the reality. RFID systems, he says, are similar to today's bar code readers. And they're less intrusive than other high-tech I.D. devices, such as retina scanners.

"RFID tags don't really create new problems. But they make people nervous about what will happen to the data (on the tags)," he said.

People are so nervous that the federal government is tiptoeing into the issue. The Federal Trade Commission has slated a workshop on June 21 in Washington to take input and discuss RFID issues, including security and privacy rights.

"The emergence of RFID as a technology with seemingly unlimited applications has implications for business and consumers alike," the FTC said in a public notice for the hearing.

Typically, RFID chips contain data on some product - its type, model number and so forth.

And chips, tags and readers must be within a few feet of each other to work. But that could change, Tien says.

"The difference between RFID tags and today's bar codes is that RFID tags can be read without you knowing it," he said. "We're not against using RFID technology to make business more effective. But if I'm wearing an RFID tag and walk though a gateway or over a sensor (or some other such reader), then it can grab the information on the tag."

Others also worry. Unless companies turn off RFID devices at the point of sale, the tags could provide a clear window into the most private corners of daily life. So says Tower Group analyst Edward Kountz in Needham, Mass.

"I don't think the privacy issue is a show stopper," Kountz said. "RFID will continue to roll out.

"But it needs to be approached very carefully."