Growing support for radio frequency identification tagging is convenient for consumers but could threaten their privacy.
This was the consensus among a panel of experts at a debates at the Cebit trade show.
Retailers such as Wal-Mart Stores have been eager to adopt the technology because it can help them track inventory and buying information. However, privacy advocates fear that the tags can be left "active" after a sale, and the data stored will continue to be accessible. There are also concerns that RFID tags placed in store loyalty cards could be used to profile consumers' shopping patterns.
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"I can't really see the positive aspects of RFID for consumers and citizens," said Rena Tangens, founder and board member of the German privacy group FoeBuD e.V.
Tangens argued that it is easy to covertly place RFID tags in products without consumers knowing. Transmitter guns could then, theoretically, access information about consumers stored in the tags.
Her group, which gives out an annual tongue-in-cheek Big Brother Award to companies deemed to be privacy violators, is calling for new legislation and technologies to protect consumers from the mishandling of RFID technology.
However, Philip Calderon, The ePC Group vice president in Europe, downplayed Tangens' concerns. "There are more myths in RFID than there are in Greek mythology," he said.
Calderon has worked with retailers as well as industry players on RFID standards. He believed RFID could offer great advantages to consumers and that the privacy concerns can be solved through the development of new technologies.
"I believe there is a place for legislation, but not if it holds back new technologies until it is put in to place," he said. "Companies shouldn't have to wait five or six years until the privacy issues are dealt with."
There are reasons why consumers would benefit from having RFID tags left active after a purchase, such as the ability to return goods without a receipt or send an item back without filling out a warranty card, Calderon said. All their purchase information would already be stored in the product's tag, eliminating the need for paper proofs of purchase.
Art Coviello, president and chief executive officer of RSA Security, agreed that RFID offers advantages to consumers, but said that he "would be very worried of his privacy".
RSA has just launched an RFID tag blocker that prevents readers from performing unwanted scanning of products or goods.
Coviello said that he also supported legislation, but not if its keeps companies from deploying RFID because the ramifications - positive or negative - cannot be known until it is in practice.
"The fundamental thing about technology is that there needs to be co-operation as never before between governments, consumers and vendors," he said. "Consumers cannot be passive. They have to state their rights and how they wanted to be protected."
However, consumers may not yet know all the potential privacy concerns related to RFID, the panel members said.
One headline-grabbing case of supermarket chain Tesco using RFID tags as a kind of antitheft system has caught the attention of some. Tesco tried to reduce theft of high-price items by attaching RFID tags to them and, when consumers pulled the items off the shelf, the in-store security cameras were triggered. Some images were destroyed if the item was purchased while others were saved to identify potential thieves.
Many shoppers became incensed when they were made aware of the programme, although Calderon and other RFID advocates said that Tesco's use of the technology was exceptional.
"There have been some mistakes made but the potential of RFID is huge," Calderon said.
Scarlet Pruitt writes for IDG News Service