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RFID Privacy Concerns Wane as Knowledge Grows

Privacy issues are often attention-getting in the RFID industry, but are not always influential. RFID Update research has identified major differences on the influence of privacy in shaping opinions toward RFID vendors, and which segments of the market are most likely to be influenced.
Tags: Privacy
Nov 30, 2006This article was originally published by RFID Update.

November 30, 2006—The more you know the less you fear, at least when it comes to RFID and privacy. That's one of the conclusions that can be drawn from the RFID Update 2006 Marketing Strategies Report, which measured responses from 559 RFID end users, evaluators, and providers regarding how much influence and importance they attach to privacy concerns and a host of other topics. The issue of privacy is highly influential to how RFID newcomers perceive vendors, but it becomes less influential as the newcomers spend time learning about the technology. Respondents from different geographic regions also had marked differences on the influence of privacy.

Privacy is most influential among the least-informed respondents in the study, those who have spent less than a year learning about RFID technology. Of these, 42 percent say vendor attitudes toward privacy are highly influential in the opinions they form of vendors, and only two percent say privacy attitudes have no influence. But at the other end of the experience spectrum, privacy is highly influential to only 17 percent of the most seasoned respondents, those who have been learning about RFID for more than four years. Furthermore, this group was also four times more likely than the least-knowledgeable respondents to say privacy attitudes have no influence over their vendor perceptions. These differences are not isolated, because the study found the influence of privacy goes down with each year spent learning about the technology.

Strength of influence also varied widely around the world. Asian respondents in particular took privacy into account in their perceptions of RFID vendors; privacy is a strong influence for 43 percent of Asians compared to 25 percent of North Americans and 24 percent of Europeans. Cultural factors probably contribute to these differences, but market maturity might also. There is lower penetration for RFID technology in Asia than either Europe or the US. Therefore it is likely that the average time spent learning about the technologies also varies by region, which could partially explain the differences in attitudes toward privacy.

Overall, many other factors were rated as more influential than privacy, including a vendor's involvement in RFID standards and certification initiatives, its collaboration with other companies in the industry, personal referrals and reference accounts (see Users Tell RFID Vendors: "Show Us the References" for more on the latter topic).

The saga of California Senate Bill 768 (SB 768), which attempted to place privacy protections on the use of RFID by state agencies, provides a good microcosm of the privacy issue. (RFID Update covered the bill and legislative process in three articles: California RFID Bill One Step Away from Law, RFID Industry Weighs In On California Bill and California RFID Restrictions Get Governor's Veto.)

The original bill introduced by State Senator Joe Simitian was very restrictive, and the RFID industry felt it exaggerated the privacy and security risks associated with the technology. The industry responded by actively lobbying and educating public officials about the technology. As a result, the senator reintroduced a less restrictive version of the bill, which spurred continued education and dialogue. More communication and education took place by the time the final bill passed the legislature and reached Governor Arnold Schwarzenegger's desk to be signed into law. Schwarzenegger ultimately vetoed the bill, saying it was, among other things, "premature" and "overbroad".

In California and around the world, privacy concerns can be a hindrance to RFID adoption. But the good news is that as knowledge grows, these barriers may lessen. For example, UK retailer Marks & Spencer recently expanded its item-level tagging program after consulting with RFID privacy watchdog group CASPIAN to gain insight on how to make tagging more palatable to the public (see Marks & Spencer to Expand RFID Item Tagging). RFID providers and users alike have a lot to learn, and perhaps less to fear.
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