Radio ID tags proliferate, stirring privacy debate

Nearly unknown a decade ago, a device the size of a pencil tip is beginning to infiltrate every corner and pocket of American life.

This recent technology - called RFID for "radio frequency identification" - is making everything from warehouse inventory to lost-luggage tracking to library checkouts easier, faster, and much more informed.

Some examples of RFID uses that have proliferated in just the past several years:

• Electronic key-sized purchase tags in Arizona that are replacing conventional credit cards.

• ID tags for Texas school children that allow local law-enforcement offices to monitor their movements.

• A proposal to examine the possible use of EZ-pass type trackers in California autos to enforce a statewide mileage tax.

• Medicine containers electronically fitted nationwide to alert to fraud, counterfeiting, and even mistakes by hospital staff.

At the same time, the rush to harness the technology is raising a host of regulatory and other concerns, including the invasion of privacy, personal freedom, and civil rights. Those issues in turn are generating concern by lawmakers for how access to data collected by such methods should be limited and protected.

Although much legislation has accompanied the new technology in some arenas - most notably healthcare and financial - many experts say the US lags behind other countries overall and has several key gaps that could be exploited as new applications reach the marketplace.

"Five years ago, no one was talking about RFIDs and the issues they raise for public policy, consumer and citizen protection," says Lisa Sotto, who analyzes the industry for Hunton and Williams. "Now the national discussion is just starting as both the states and federal government realize that the current lack of overall framework for regulating the collection of [this] data is untenable."

Opponents of RFIDs worry that widespread use of the tags could lead to all kinds of misuse. Besides the gathering - and perhaps selling - of biographical and logistical data, unknown by unsuspecting consumers, companies could track consumers who buy their products to find how often the products are used and where.

For example, if someone bought a pair of shoes embedded with an RFID, the store could track how many times that customer returned to the store wearing those shoes. And knowing by radio signal that a repeat customer was in the store could prompt better service from salespersons. But such practices could also lead to customized prices after companies create consumer profiles showing how much residents in different neighborhoods are willing to pay for the same merchandise. Proponents counter, however, that such misuses could easily be avoided with encryption and other safeguards.

"We have not even gotten close to the big picture on what will be the good side and the bad side of this burgeoning technology," says Jeff Wacker, a futurist at Electronics Data Systems who consults with businesses and consumers about the prospects of RFIDs. "For now the only thing that is clear is that this is a genie that is out of the bottle, a juggernaut whose use is only going to get bigger."

Public furor has already erupted several times, generating organized opposition against two companies in 2003 (Benetton and Gillette) which led to cancellation of limited-use plans. And the use of EZpass toll data has been subpoenaed for divorce courts, hoping to establish the true whereabouts of errant husbands and wives.

"Almost no one is talking about it publically, but every day all over the country toll pass information is being used by lawyers in divorce cases," says Fred Cate, Director for Applied Cybersecurity Research Indiana University. "What is scaring a lot of people is they feel that as soon as each new idea for the technology exists, it's only seconds before the government will have it."

While much concern is being raised about regulating the growing use of RFIDs, there are many who see the technology as a greater benefit than infringement on daily life.

"The great side of all this is there will be plenty of ways in which RFIDs will be a win/win for both companies and consumers as companies continue to figure out more ways to enrich lives," says Alan Chapell, who runs a New York-based consulting firm on consumer privacy and marketing. "More and more, people will begin to realize the great benefits they can have."

For instance, California is considering the use of RFIDs to help eliminate gas taxes by instead tracking and taxing commuters on the number of miles they drive.

"The people who created the highways of America have always wanted to pay for them by charging a mileage tax but taxed gasoline instead because there was no way to track mileage economically," says Martin Wachs, a transportation specialist at UC Berkeley. "Now the advancing ability of RFIDs and their dropping cost has changed all that. There are trade-offs with privacy issues but it is an idea worth taking very seriously."

For now, however, experts in privacy law and marketing analysts say more education and debate is needed. And crucial to that debate, they say, are whether users know they are being tagged, whether they have a choice, and who benefits.

"There are going to be many more clashes about this before it gets resolved with satisfaction to most players," says Wacker. "Business needs to be more open about what they are up to, and consumers need to grow in awareness, take responsibility and ask lots of questions. And lawmakers need to catch up to what is at stake before it's too late."