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FTC Readies an RFID Report

The Federal Trade Commission chairman affirms FTC’s jurisdiction over RFID and announces plans to issue guidelines on the technology.
By Claire Swedberg
Oct 05, 2004In reponse to a request from Senator Bill Nelson (D-Fla.), Deborah Majoras, the chairman of the Federal Trade Commission (FTC), outlined the agency’s jurisdiction over RFID and announced that the FTC is preparing a report that will offer some guidelines on the subject.
FTC Chairman Majoras

Majoras answered five questions that Nelson had posed in a letter regarding the agency’s oversight of RFID and the technology’s potential as a privacy risk (see Senator Queries FTC About RFID). In her written reply, Majoras asserted that the FTC has jurisdiction over RFID inasmuch as it has jurisdiction over any commercial practices that can be considered deceptive or unfair. She stated, “If a company’s privacy policy materially misstated how the company used RFID to collect information about consumers, the commission could bring an enforcement action.”

Nelson had asked the FTC chairman what actions the agency has taken to regulate RFID technology, to which Majoras responded that in June, the FTC convened a workshop, entitled “Radio Frequency Identification: Applications and Implications for Consumers,” to “examine more closely both the benefits and concerns associated with RFID.” That workshop, she wrote, was an example of the agency’s effort to consider future regulation that may be necessary.

The FTC kept track of comments and complaints it received about RFID use from the workshop’s participants, according to Majoras, although the agency has not received complaints independent of the workshop. Thus far, the commission has not taken any enforcement actions against any companies and has not compiled any statistics as to who is using RFID technology, although it does monitor new developments involving RFID.

The greatest concerns of consumer and privacy advocates who participated in the FTC RFID workshop, Majoras wrote, were the potential consequences of using item-level tagging. While the tagging of pallets or crates would ensure that the tags remained in the warehouse, if individual products were tagged, consumers might be taking home functioning RFID tags, perhaps without their knowledge.

Nelson hopes that this issue will be addressed in the FTC report, according to the senator’s deputy press secretary, Christine Hanson. The FTC’s planned report will be based on what the agency learned through its RFID workshop, according to Majoras, who did not identify a date when the report will be released.

The senator, Hanson explained, would like to see regulations that ensure companies are required to notify consumers if products are individually tagged. “At this point, consumers need to know,” Hansen says. However, it is not yet clear whether the agency will issue such regulations. “We’re waiting to see what the report says. If it [includes] regulations, let’s see what they are,” she says. Senator Nelson, says Hansen, “realizes this is an exciting technology, but he wants to secure the safety and privacy of the consumer.”

Nelson sent a similar letter to FCC Chairman Michael Powell seeking clarification of that agency’s jurisdiction over RFID technology as well. Nelson’s office expects a response early this month.

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