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Federal Trade Commission Holds RFID Workshop

Wal-Mart's Simon Langford and other attendees discussed ways to protect consumer privacy, and the role the U.S. agency should play regarding the use of radio frequency identification.
By Beth Bacheldor
Sep 25, 2008Industry experts, government officials and consumer advocates from the United States and abroad met with the Federal Trade Commission (FTC) in Washington, D.C., on Wednesday to discuss RFID applications—specifically, contactless payment devices and item-level tagging—and their implications for consumer protection policy. The "Transatlantic RFID Workshop on Consumer Privacy and Data Security" is the latest in ongoing efforts by the FTC to better understand radio frequency identification so it can more thoughtfully construct public policy, and enforce that policy, if and when necessary.

"Just a few thoughts about how this program fits into our larger interests dealing with data security, privacy and RFID in particular," FTC chairman William Kovacic told forum attendees. "We treat the enforcement program as a deeply integral part of our efforts to draw attention to the importance of legal commands dealing with data protection and privacy, and to our effectiveness in developing larger policy messages throughout North America. But standing alone, we've come to realize that's an insufficient basis to be an effective policy maker. Other critical dimensions involve public education, cooperation with non-government organizations and business associations, with the research and development programs. That intuition has guided the pursuit of policy making on the part of both the U.S. authorities, and, indeed our counterparts in Europe. That is why so much attention is given to the development of workshops, and to the convening of events in which observers from a variety of different settings can come participate in a thoughtful discussion on how the technology is developed."

To better understand how Europe is approaching consumer security and privacy with regard to RFID, Hana Pechácková, a representative of the DG Information Society and Media within the European Commission (EC), discussed the details of the EC's upcoming RFID guidelines designed to protect consumer privacy rights.

The EC has been investigating privacy concerns with regard to RFID for some time. In March 2007, the commission announced plans to create a stakeholder's group to advise the European Union regarding its RFID strategy, with the goal of issuing a recommendation on data security and privacy, and of assessing the need for further legislative steps to safeguard both (see EC Floats Plan to Facilitate RFID Usage).

The commission released a draft of the guidelines earlier this year, and at this week's meeting, Pechácková said it expects to present the final guidelines soon. "The main purpose of this recommendation," he explained, "is to provide guidance by identifying principles in relation to RFID use that would seek to ensure maximizing benefits of RFID use, without compromising the right to integrate privacy of an individual in a democratic society." Among the various recommendations, the commission will suggest that companies planning to employ RFID should attach a symbol or sign to the tagged goods to alert customers to the presence of RFID. In addition, the commission will also recommend that any retailers selling tagged items must be able to deactivate the tags at the point of sale. "Customers should not be put in a position where they cannot be assured that the tags are deactivated because the retailer does not have the know-how, or does not have the capacity to do it," Pechácková stated. "We are arguing for this."

Not all of the experts that spoke at this week's forum agreed with point-of-sale deactivation, however. Paul Skehan, director of the European Retail Round Table, a network of European business leaders established to represent large retailers on a range of issues, told attendees he does not know exactly what the EC's final recommendation will be. But, he added, "I suspect I know what's in the final recommendations, so I'll speak about what we think is in there. Do we support the recommendation? Very clear answer: yes and no."

A good recommendation, Skehan said, could push EU member states in one direction, rather than having 27 different laws. However, he noted, a bad recommendation would be one calling for retailers to deactivate at the point of sale. "We don't have a difficulty with deactivation, per se," he said. "If a recommendation comes in the next couple of weeks which says deactivate at point of sale, I can tell you it will stop item-level tagging in the retail sector of Europe stone dead. Why? There are—in those 25,000 to 27,000 stores—hundreds of thousands of points of sales, and in those same stores, you might have a store with 30,000 units, or different types of products, going through checkout. Maybe a couple of hundred of those are tagged at the moment. Can you imagine the cost of putting deactivators into points of sale when a minuscule percentage of the products coming through are actually needing to be deactivated? It is inconceivable, and my members would walk away from it."

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