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Legislation Isn’t the Answer

The death of the California RFID privacy bill is a good thing for consumers.
By Mark Roberti
Jul 19, 2004I’ve purposely steered clear of saying how I think the legitimate concerns raised about RFID and consumer privacy should be addressed. There are two reasons: I don’t know the best way to protect consumer privacy, because I can’t predict how the technology will be used or abused. Also, I see RFID Journal as a provider of information that others use to make decisions. We don’t presume to tell specific companies how
they should use RFID to improve their business, and it would be a mistake to tell governments how they should regulate the use of RFID.

Having said that, I will say that legislation is not the answer—at least not yet. President John F. Kennedy liked to say that you shouldn't take the aspirin until you have a headache. Legislating what someone expects to be a problem is simply a bad idea.

That’s why I am pleased that the California bill sponsored by Sen. Barbara Bowen has been rejected by the state assembly (see California RFID Legislation Rejected). Bowen is neither anti-technology nor anti-business. Her main argument for proposing legislation now is that if governments don't regulate before the technology is deployed, they will never have the opportunity. Companies, she says, will argue that they spent billions on technology, and they can't simply rip it out and put in new technology to comply with privacy regulations.

But had Bowen’s proposal been passed, it could have prevented entrepreneurs from developing RFID applications that would be beneficial to consumers. And I absolutely believe that RFID will have tremendous benefits for consumers. I also believe that smart companies will protect their customers' privacy, because they will lose business if they don't.

If companies do, in fact, abuse consumer privacy—or if the technology is somehow abused in ways the industry hasn't foreseen—then legislation might well be necessary. But at that time, there will be less risk that we will be cutting off areas of innovation and consumer benefits, because the laws will be aimed at solving a real and present danger to consumer privacy.

Should governments do nothing until there is a problem? Not necessarily. Virginia is investigating the potential impact of RFID on consumer privacy. That's a good idea. Legislators should understand the many benefits as well as potential problems with the technology. The provincial government of Ontario, Canada, has issued guidelines about how RFID fits with existing privacy laws, as have the governments of Portugal and Japan.

One of the best things governments could do is to help educate consumers about what RFID is, what it can and can’t do and what information could be collected. If consumers understand the technology, they will let retailers know what they are—and are not—willing to accept by deciding where to shop. Some might say that retailers will use the technology secretly to spy on their customers. It's possible, but when that company is exposed—and it will be exposed—it will damage its credibility and lose customers, and that will be a lesson to other retailers.

What consumer advocates really fear is that people will passively accept whatever retailers choose to do. What they are saying is they know more about what's good for the consumer than the consumer does. I give people more credit than that. If consumers are armed with good information, they will act in their own self-interest and that will prevent problems. The alternative is to try to figure out how the technology will evolve, how it will be used and how consumers want to use it—and then try to act on the consumers’ behalf. The problem with that approach is there is a good chance that any legislation passed now will hurt consumers more than it helps them.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below.

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