WASHINGTON, JULY 14, 2004 - "The most common commercial application of Radio Frequency Identification (RFID) uses radio waves to transmit data from a transmitter called a 'tag' to a scanning device called a 'reader,' which can be networked with a computer database," explained Rep. Cliff Stearns (R-FL), Chairman of the Commerce, Trade & Consumer Protection Subcommittee. "These RFID tags can be attached by manufacturers and retailers to products and packaging for tracking large bulk containers and pallets along the supply chain."
"One possible application of this technology involves using readers at a store checkout - consumers place tagged items in their shopping cart, pass through the checkout where the items are read, and their accounts are automatically updated without waiting in line," said Stearns. "However, this point of sale application raises privacy issues and these questions. Will I be able to disable or remove the tag? What happens to the data harvested from my purchase? How secure is that data, and what prevents third parties from accessing and misusing that information?"
The subcommittee heard testimony from a distinguished panel of witnesses from academia, business, and consumer privacy organizations. Representing WalMart, the world's largest retailer, Linda Dillman, Executive Vice President & Chief information Officer, outlined the company's use of RFID. "Currently, cases and pallets of 21 products from eight suppliers destined for one distribution center and seven Supercenters in North Texas are being tagged. The readers assist Wal-Mart in knowing when a product is received, where it is stored, when it goes on the sales floor, if it returns for any reason, and when the case is submitted for recycling."
Paula J. Bruening, Staff Counsel, the Center for Democracy & Technology ,presented privacy concerns over the use of RFID. "Discount cards, other 'customer loyalty cards' and credit cards already collect information about individuals, providing a rich store of information about our likes and dislikes in cars, clothing, travel and many other preferences. The extent to which RFID tags possess the ability to further enhance those profiles by tracking an individual's movements - whether through a store or through the world - will raise new and deeper concerns."
Concluded Stearns, "Like every new technology and application, RFID technology has the power to benefit society. It also presents a number of serious issues if it is misused to do harm. This hearing allowed us to get the facts about RFID, learn more about its applications, and examine the public policy issues generated by its use and widespread deployment."
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