FTC BEGINS PROBE OF PRIVACY THREAT FROM RFID
The FTC is closely examining the consumer privacy implications of radio frequency identification (RFID) and may ultimately contemplate rules to protect the public, Comr. Mozelle Thompson said Mon. But Thompson said a decision on the need for regulation is still many months off and would only follow a probe by the FTC. The FTC held an all-day forum Mon. in Washington to begin discussions.
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“There’s a lot of misconceptions about what RFID is, what it can do and what it is doing now,” Thompson told us: “What we're trying to do is to get public officials and consumers and industry to begin talking about concerns… It’s also a good time for consumers to hear how it’s being used and whether there are potential uses in the future. It’s also good for policymakers to hear what their role is. Thompson said often “the fears and list of horribles” tied to new technologies can be much worse than reality. He said of FTC-imposed regulation: “I think it’s really early for that. We're only now trying to get what it is. How it’s being used.”
Thompson also expressed concerns about state or federal legislators moving too quickly to RFID legislation. “I don’t even want to even talk about legislation,” he said: “I think it’s important to get a handle on what the issues are first and I know that that is an interesting challenge for a lot of people in the legislative or government arena who have to respond to worse case scenarios or the complaints that they get. But I think that we're only now trying to get a scope on the issue and that includes the benefits. I would ask people to be just a little patient.”
Many of the FTC’s concerns appear focused on fears raised by privacy groups, such as stores attaching smart wireless tags to high-end garments without the buyer’s knowledge, which could then alert clerks when the customer returns. But several panelists Mon. downplayed the threat to privacy or whether many stores would even contemplate that kind of customer tracking.
Britt Wood, senior vp of the Retail Industry Leaders Assn., said Mon. a large number of retailers are already deploying RFID, but mostly to keep track of boxes and pallets as they're moved from warehouse to store. Wood predicted that attaching RFID devices to individual garments and other goods is years away from becoming common because of the cost. “We do not see widespread item adoption or use for at least 10 years and if you look at the economics involved with this you get an understanding of why it really doesn’t make sense,” he said. Wood said retail customers “vote with their feet” and stores would be reluctant to engage in any practices that raise privacy concerns.
Simon Langford, mgr.-RFID strategy at Wal-Mart, said the chain looked at individual item tags but has decided that tags on pallets and crates, allowing the tracking of goods to the point they reach the sales floor, was all that makes sense from an economic standpoint.
The Competitive Enterprise Institute Mon. released a paper calling RFID “an unlikely threat to privacy.” CEI said RFID may have many benefits for consumers and the FTC doesn’t need to intervene. “Activists are urging concerns unrelated to real-world experience, with potential harms to consumers unidentified,” the group said. “But substantial benefits from RFID are in the offing. The FTC and state legislatures should avoid intervention. Each of the many ‘principles’ called for by pro-regulation activists may have its place, dictated by the actual interests involved in real implementations of RFID. But discussion of RFID regulation is premature.”