RFID Now in the Legislative Spotlight

Radio frequency identification (RFID) technology has been often in the news lately, including a recent move in California to regulate its use. RFID technology uses radio waves to communicate a signal over a short distance between an RFID tag and a reader. Each tag is able to communicate a unique identifier, just as does a bar code. Because the tags and readers are small and inexpensive, a network of tags and readers can be easily and unobtrusively implemented in a location such as a retail store or a warehouse. The tag's signal is picked up by only one reader at a time. When a reader receives a signal from the tag, the reader's location can be correlated with the tag identifier to get a reasonably accurate location of the tag. As a tracking system, RFID is being promoted by the US Food and Drug Administration (FDA), as "the most-promising track-and-trace technology" to ensure the safety of the pharmaceutical supply chain. In a February 18, 2004 report on "Combating Counterfeit Drugs", the FDA called for all US drug manufacturers and distributors to adopt RFID systems by 2007, the goal being to ensure that only drugs manufactured under secure conditions are introduced into the supply chain. Some retailers have already begun using RFID tags for inventory tracking. Wal-Mart Stores has reportedly asked its top suppliers to gear up for RFID tags on all shipments headed to its warehouses and stores next year. German retail chain, Metro Group, also has plans to install RFID at 250 supermarket and wholesale stores in Germany within 2004. The chain is currently testing in-store RFID applications, including self-checkout lanes and anti-theft systems. However, the technology has its detractors. In November 2003, a coalition of US privacy and consumer rights advocates released a "Position Statement on the Use of RFID on Consumer Products". The coalition report cites a number of concerns about consumer-level uses of RFID tags, including the use of hidden tags and readers to track unwitting consumers and the potential for aggregation of location data with personal information. Initially, the coalition is requesting manufacturers and retailers to agree to a voluntary moratorium on consumer-level use of RFID until a formal technology assessment can take place. California has become the first state to consider legislation specifically governing use of RFID. California Senate Bill 1834, introduced last month, would require businesses to notify consumers that an RFID system is being used to track and collect information about them. Consumers would need to provide express consent to such tracking and collecting of information. See FDA report on "Combating Counterfeit Drugs" at: http://www.fda.gov/oc/initiatives/counterfeit/report02_04.pdf. Related news coverage is available at: http://news.com.com/2100-1008_3-5161220.html. See news coverage of retail developments using RFID at: http://www.news.com.com/2100-1008-5139627.html. See Consumers Against Supermarket Privacy Invasion and Numbering, "Position Statement on the Use of RFID on Consumer Products" at: http://www.tinyurl.com/2mf67. See news coverage regarding the California Senate Bill at: http://news.com.com/2100-1014_3-5164457.html. Summary by: Jennifer Jannuska