RFID: Radio Frequency Identification Radio frequency identification technology, known as RFID, has been described as "tech’s official Next Big Thing." RFID is not actually a new technology, but it is being applied in new ways, spurred by technological advances and decreased costs. Once used during World War II to identify friendly aircraft, RFID is now being used in a variety of public and private sector settings, from hospitals to the highway. In RFID systems, an item is tagged with a tiny silicon chip and an antenna; the chip plus antenna (together called a “tag”) can then be scanned by mobile or stationary readers, using radio waves (the “RF”). The chip can be encoded with a unique identifier, allowing tagged items to be individually identified by a reader (the “ID”). Thus, for example, in a clothing store, each particular suit jacket, including its style, color, and size, can be identified electronically. In a pharmacy, a druggist can fill a prescription from a bottle bearing an RFIDchipped label confirming the authenticity of its contents. On the highway, cars with RFID tags on their windshields can move swiftly through highway tollbooths, saving time and reducing traffic congestion. At home, pets can be implanted with chips so that lost animals can be identified and returned to their owners more readily. In each case, a reader must scan the tag for the data it contains and then send that information to a database, which interprets the data stored on the tag. The tag, reader, and database are the key components of an RFID system. RFID proponents believe that the ability of these systems to deliver precise and accurate data about tagged items will improve efficiency and bring other benefits to businesses and consumers alike. One major retailer has already announced a mandate for its largest suppliers to begin tagging cases and pallets of merchandise. Other companies in the U.S. and abroad reportedly are exploring similar directives. Spending on RFID implementation in the retail supply chain alone has been estimated at $91.5 million last year – an amount expected by some to exceed $1 billion by 2007. Outside the retail sector, libraries across the country reportedly are already tagging books, and the FDA has announced that it is actively encouraging pharmaceutical manufacturers to use RFID to fight drug counterfeiting. While these developments may offer significant benefits for industry and consumers, some applications have raised privacy concerns. The capacity to encode unique identifiers at the individual item level may have revolutionized thinking about inventory management, but it has also raised fears that this technology might be used to track individual products out of the store and into consumers’ homes or otherwise monitor individual consumer behaviors. As with the Internet and other data-intensive technologies, these concerns must be addressed so that they do not hinder the development and deployment of RFID in the marketplace. On June 21, 2004, the Federal Trade Commission explored these issues at a public workshop entitled “Radio Frequency Identification: Applications and Implications for Consumers.” The Workshop brought together technologists, RFID proponents, privacy advocates, and policymakers to discuss the range of applications for RFID, the future of this technology, and its implications for consumers. This staff report will summarize the discussion at the Workshop and offer some preliminary recommendations for addressing the privacy concerns raised by some participants. Part I of the report provides an overview of the issues the report covers and a summary of the FTC staff’s conclusions. Parts II through V summarize the Workshop panel discussions and highlight some of the key points made in the written comments submitted to the Commission in connection with the Workshop. Specifically, Part II discusses how RFID technology works. Part III describes current and emerging uses of RFID technology, both in the private and public sectors. Part IV discusses the consumer privacy implications of RFID applications and database security issues. Part V describes different proposals to address consumer privacy concerns, including technological approaches and self-regulatory efforts. Finally, Part VI offers Commission staff conclusions regarding steps that RFID users may take to alleviate RFID-related privacy concerns. As explained in Part VI below, based on the information received in connection with the Workshop and other available information, the FTC staff concludes: • Industry initiatives can play an important role in addressing privacy concerns raised by certain RFID applications. The goal of such programs should be transparency. • Any industry self-regulatory program should include meaningful accountability provisions to help ensure compliance. • Many of the potential privacy issues associated with RFID are inextricably linked to database security. As in other contexts in which personal information is collected from consumers, a company that uses RFID to collect such information must implement reasonable and appropriate measures to protect that data. • Consumer education is a vital part of protecting consumer privacy. Industry members, privacy advocates, and government should develop education tools that inform consumers about RFID technology, how they can expect to encounter it, and what choices they have with respect to its usage in particular situations. Next: The ABC's of RFID >> Back to Pat's Planet.net