The Politics of RFID

Published November 1, 2004

Whenever politicians express interest in designing technology standards, the nation’s tech community should grow concerned.

Radio Frequency Identification (RFID) is the latest subject of political scrutiny. Of rising interest in the retail industry, RFID “tags” are chips placed on merchandise at the factory, allowing it to be tracked from point of manufacture to the store shelf.

RFID tags are akin to the bar codes you find on most products these days, but different in that they have microchips that listen for a radio query and respond by transmitting their unique code. Retailers such as Wal-Mart are experimenting with the tags to increase efficiency, reduce theft, and cut costs. But the advocates of privacy regulation are warning of potential problems with RFID tags, and some politicians are jumping to offer government help.

At a conference in Chicago in September, Sen. Byron Dorgan (D-North Dakota) told participants it’s time for the federal government to get involved in the development of RFID technologies.

“We need to move now, as this technology is driven by others like the [Department of Defense] and Wal-Mart,” Dorgan said, according to RFID Journal. “We can observe this or be an active partner, playing a role in addressing the challenges [of RFID].”

Dorgan has welcomed RFID manufacturers to his state, but his enthusiasm for political meddling in the market should send shivers down the tech community’s spine. For as much as congressional attention might bring federal pork, it also changes the environment. Decisions that should be based on the marketplace instead become influenced by political favors and pressure.

Politics and Technology

Politicians should not be deciding how to design and implement this technology, from either an efficiency or a security perspective. That role should go to those involved in creating and using the technology, and it’s time for tech experts to say so. If they don’t, political agendas could get in the way of a positive future for RFID. The senator from North Dakota is not alone in his interest. Lawmakers in at least five states are considering RFID legislation.

But why legislation is needed at this time, other than to assuage fears whipped up by professional privacy hawks, is unclear.

RFID is currently harming no one. That’s not to say it could never happen, but legislators should not be exploiting a frightened public to score political points. That’s no way to make policy or ensure the best use of technology.

Fear of new technology, of course, is not a new phenomenon. As CNET’s Declan McCullagh wrote recently, in the 1970s, talk show host Phil Donahue attempted to stoke fears that bar codes would allow “grocery stores to trick consumers.” The reality is, McCullagh noted, that “the humble bar code saves Americans more than $17 billion a year in grocery stores alone.”

Privacy Issues and Advocates

One of the fears current privacy advocates often discuss is the possibility that attaching RFID tags to individual products will allow thieves or others with an RFID reader to be able to tell from the outside what’s in someone’s home.

This is a plausible scenario, and before Wal-Mart or any other store starts labeling individual products–right now they are labeling only cases and pallets–they will have to find a way to address this potential problem. For instance, they could commit to offering “kill command” readers that turn off the RFID tags permanently when consumers leave the store.

Some privacy advocates also are concerned the tags would allow stores to see what products people pick up but don’t buy, allowing greater insight into consumer behavior. This seems unlikely to bother the average consumer. Naturally, most seek to guard personal details about income and health, but if the trade-off is faster service or a better-tasting lunch, few get touchy if McDonald’s knows they prefer a Big Mac over Chicken McNuggets.

Indeed, one could imagine a scenario in which consumers actually want retailers to know they’d prefer one product over another … if they could get it less expensively. So they pick up products and put them down to trick the retailer into giving them coupons on the “rejected” product for future use. If this type of pro-active consumer preference tracking did become a concern, it seems likely other stores would rein it in with ads enticing customers to enter their “hassle-free” store.

RFID is poised to revolutionize retail and other areas of commerce, but it will reach its full potential only if allowed the flexibility to respond to market demands. If industry insiders don’t step up and take on the privacy scaremongers and posturing politicians, we could all lose out on what promises to be an extremely useful technology.

Sonia Arrison ([email protected]) is director of technology studies at the Pacific Research Institute.