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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, asare potential speed bumps. Companies like Target and Wal-Mart aremoving ahead with initiatives to eventually require all theirsuppliers to use RFID tags, which have wireless capabilities thathelp track products as they move through the supply chain. But, aswith many new technologies, privacy is a big issue.

Several states are considering legislation that would regulatethe use of RFID. Their concern is that companies could use RFID tocollect 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 whenwe have the ability to put privacy protections in place before thegenie's out of the bottle." The basic tenets of the billcall for telling consumers that an RFID system is being used,getting consent before tracking or collecting information, andremoving or destroying RFID tags before a consumer leaves thestore. These points will probably be echoed in legislationelsewhere, including an upcoming bill in Massachusetts.

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