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Private Matters

Retail alert: Keep an eye on new RFID privacy legislation.

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This story appears in the October 2004 issue of Entrepreneur. Subscribe »

The buzz on Radio Frequency Identification (RFID) is growing, as are potential speed bumps. Companies like Target and Wal-Mart are moving ahead with initiatives to eventually require all their suppliers to use RFID tags, which have wireless capabilities that help track products as they move through the supply chain. But, as with many new technologies, privacy is a big issue.

Several states are considering legislation that would regulate the use of RFID. Their concern is that companies could use RFID to collect data on unsuspecting consumers. State Sen. Debra Bowen (D-CA), who introduced a bill into the California legislature, said, "There's no reason to let RFID sneak up on us when we have the ability to put privacy protections in place before the genie's out of the bottle." The basic tenets of the bill call for telling consumers that an RFID system is being used, getting consent before tracking or collecting information, and removing or destroying RFID tags before a consumer leaves the store. These points will probably be echoed in legislation elsewhere, including an upcoming bill in Massachusetts.

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