Regulating Radio Frequency Identification Systems - Fact Sheet
Senator Jarrett T. Barrios and Representative Thomas Kennedy
Massachusetts
What is a Radio Frequency Identification (RFID) System?
Radio Frequency Identification, or RFID, is a technology that uses small microchips, imbedded into products and packaging, and RFID “readers” to transmit information about product whereabouts to a central data collector. Unlike a UPC barcode, RFID allows a company to track an individual product by providing a unique reading on when that product was manufactured, distributed, and purchased. This is especially useful in improving shipping accuracy and cutting down on fraud or theft in transit, but the technology can also be used to track product movement on the shelves and beyond. While this technology can be immensely useful, it also threatens to interfere with citizens’ right to privacy unless it is adequately regulated.
Radio Frequency Identification (RFID) technology has the capacity to significantly impinge on a customer’s right to privacy.
In the last year, major companies including Gillette, Benetton Group, Target, Tesco, Albertsons, the Metro Group and Wal-Mart, have announced plans to incorporate into their products devices known as radio frequency identification systems (RFIDs). The identification tag used in RFID technology will provide useful information about a product to retailers, but it can also be used to invade the privacy of the product’s owner. Companies can use the tags to see when and where a product was purchased, and can track the owner’s whereabouts whenever s/he is in range of an RFID reader.
Consumers have a right to know when RFID readers are being used and to request the removal of unwanted RFID tags.
Because the new technology has the capability to invade a customer’s privacy, customers must be made aware of situations in which they could be tracked. This includes knowing whether or not a product contains an RFID tag, and whether or not a store uses RFID readers. More importantly, customers must be made aware that they have the right to remove the tag once they purchase an item.
Bad players are strongly tempted to violate consumer privacy when the technology to do so is available.
Although RFID proponents argue that regulation is unnecessary because businesses will value their consumers too much to violate their privacy, this is not necessarily the case. In a Wal-Mart store in Broken Arrow, Oklahoma, for example, it is alleged that the company hid RFID detectors in its lipstick shelves to send consumer information to Proctor & Gamble’s headquarters in Cincinnati. Although Wal-Mart protests that it posted signage to that effect (and Proctor & Gamble denies the incident), this practice shows that the desire to track consumers and their purchases often overrides any consideration of maintaining strong customer relations.
The reach of RFID extends far beyond the store.
Although RFID readers can currently only read at a distance of 10 feet, they can be installed virtually anywhere. RFID technology is already in use in the E-Z-Pass system at Massachusetts toll booths, and it is not hard to imagine that with more and more products tagged with RFID technology, the number of potential screening points could increase dramatically. Left unregulated, these could lead to near-constant surveillance of consumers without their knowledge. There has already been at least one case in which such information has been used against citizens in court – and it is only a matter of time before insurance companies and others begin purchasing rights to track their customers.
The proposed regulations of RFID devices do not detract from the usefulness of the new technology.
RFID technology was designed to track products while in transit, to ensure against theft, etc. Once a product has been purchased, the RFID tag loses its practical value to the retailer, so removing the tag does not affect the retailer or the usefulness of the RFID system.
Regulating this technology now imposes no significant restrictions on its development and will save the substantial trouble of adjustments once it has already been implemented.
The proposed legislation merely requires businesses to inform consumers when RFID devices are in use, and to refrain from tracking products that are not their own. In no way does this legislation impinge on the development of the new technology, but it does make businesses aware of what consumer rights will demand of them once the technology is widely available.
Massachusetts is not alone in its concern for the privacy of its consumers with RFID systems.
California, Utah, Maryland and Virginia have also proposed legislation to regulate the use of RFID technology to protect consumer privacy.
What This Bill Does
Requires all retail establishments to post signage to the effect that RFID is in use in their store
Prevents manufacturers from surreptitiously inserting RFID in their products by requiring all products that contain RFID to be labeled and for the chip to be removable.
Prevents retailers from using an RFID reader to track information about products that are not their own, data which might be used to learn information about a consumer.
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