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Senator Queries FTC about RFID

U.S. Senator Bill Nelson asks the Federal Trade Commission to explain its role and strategy for addressing RFID’s potential risks to privacy.
By Claire Swedberg
Tags: Privacy
Sep 20, 2004Seeking answers to RFID-related privacy concerns, U.S. Senator Bill Nelson (D-Fla.) has gone to the Federal Trade Commission (FTC) with a list of questions about the technology. Nelson, a member of the Senate Commerce Committee, sent FTC chairwoman Deborah P. Majoras a letter on Aug. 31 questioning the FTC’s role in regulating RFID technology. The senator stated that RFID technology poses a significant range of privacy and security risks.

In the letter, Nelson questions what jurisdiction the FTC has to regulate the technology, as well as what actions the agency has taken or plans to take. The FTC has some jurisdiction over RFID, according to Nelson staff members, which Nelson hopes to clarify. One example of the agency’s involvement in RFID was a one-day seminar on RFID, hosted by the FTC in June, that included several industry and public interest witnesses.

Senator Nelson
Nelson would like to know if the FTC will use its general authority over unfair or deceptive trade practices to regulate RFID and bring enforcement actions in necessary. Nelson also asks whether the FTC has received complaints regarding RFID use that may raise concerns for consumers. An example of such use, he states in his letter, would be a pilot program run with RFID tags embedded in limited number of products to test the effectiveness of the system.

The letter refers to a 2003 incident, in which, Nelson wrote, a razor blade manufacturer embedded RFID tags in a limited number of its products to track and sell the blades without the knowledge of consumers. This, Nelson wrote, was a privacy violation.

In that 2003 case, the Gillette Co. had begun installing an RFID-enabled "smart shelf" in June in order to track tagged razor blade packages in a Brockton, Mass., Wal-Mart. In July 2003, however, Wal-Mart announced that it had canceled the proposed trial program before it ever got started.

“Was it tracking consumers?” asks Christine Hanson, Nelson’s deputy press secretary. “If it was, that’s a problem because they didn’t know.” And whether or not the tags were to be used simply for inventory tracking, “the consumers didn’t have a choice,” Hanson says, which is what caused Nelson’s concern.

Nelson also pointed to other scenarios that could indicate potential abuses of RFID technology, such as the use of RFID by employers to learn what types of tagged medicines an employee is carrying, or the use by a retail store to determine what products a consumer carries in her purse and then marketing to her based on that information.

In the letter Nelson also asks whether the FTC has taken any enforcement actions against companies who have abused RFID technology and whether the agency has compiled any statistics about the use of RFID, such as which companies use it.

The purpose of the letter, says Hanson, is to “get a background of what is being done.” She adds, “He wants to know what the landscape is.” After the FTC responds to the letter, which is expected to be in late September or early October, Hanson says Nelson will consider the next step.

“New technology is coming out every day,” Hanson says, and Nelson’s goal is to ensure that “safeguards are in place so that it is not abused.”

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