RFID and privacy: Debate heating up in Washington

WASHINGTON - 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 Inc. move toward large-scale use of the technology.

While a number of privacy groups have raised concerns about the potential uses of radio frequency identification (RFID) chips, the U.S. 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 U.S. 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 25 feet (750 centimeters).

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 -- for 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 Corp., as well as government agencies such as the U.S. Department of Defense (DOD), are embracing RFID technology as a way to improve their supply-chain efficiency. Wal-Mart, leading the way on RFID adoption, plans to phase in use of RFID, with major suppliers of its north Texas stores required to use RFID 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 Co. 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, a Vermont Democrat, to suggest that federal legislation may be necessary at some point. He criticized what he called Wal-Mart’s "clandestine" testing of RFID.

Leahy, speaking at Georgetown University in March, praised the potential of RFID, but also suggested a federal law may be needed before privacy intrusions "reach the point of behavior 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 says its RFID tests have 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, said Gus Whitcomb, a Wal-Mart spokesman. After the lipstick test, Wal-Mart decided to focus on the store-room uses on RFID.