RFID V. Privacy Risks and Solutions




© Springer-Verlag Berlin Heidelberg 2015
Yimeei Guo (ed.)Research on Selected China’s Legal Issues of E-Business10.1007/978-3-662-44542-6_4


4. RFID V. Privacy Risks and Solutions



Yimeei Guo  and Ying Luo 


(1)
Management Science Department, Xiamen University, Xiamen, 361005, People’s Republic of China

 



 

Yimeei Guo (Corresponding author)



 

Ying Luo



Abstract

Radio frequency identification (RFID) is a generic term for technologies that use radio waves to automatically identify objects. An RFID chip comprises a microchip and a tiny antenna that transmits data from the chip to a reader. The reader is activated whenever the antenna comes into range, and the data can be used to trigger an event—such as raising an alarm or signaling that a pallet of goods has arrived in a warehouse. Usually, the range is no more than a few feet. But there are concerns that such applications will breach the privacy rights of individuals and threat the security of both organizations and individuals. There are also a range of technical, business, and political barriers to RFID’s development. To avoid being off the pages limit, this paper wants to focus on the critical privacy risks to individuals by RFID. Then, it discusses feasible legal and technical solutions to RFID with some emphasis on the former, i.e., selective current legislative developments in different jurisdictions, to provide companies with insight on what compliance with legislations may entail and to assist companies in possible self-regulation to address these concerns as well. Finally, this article presents its conclusion and suggestion aiming at a healthy and sound atmosphere to RFID’s development.


Keywords
RFIDPrivacy risksSolutionsSelf-regulation


Published by “Proceedings of the 4th Int’l Conference on Innovation & Management” Vol. II, 2007.12.5-6, pp.1849-1853<ISTP indexed>



4.1 Introduction


Radio frequency identification (RFID) is a generic term for technologies that use radio waves to automatically identify objects. An RFID chip comprises a microchip and a tiny antenna that transmits data from the chip to a reader. The reader is activated whenever the antenna comes into range, and the data can be used to trigger an event—such as raising an alarm or signaling that a pallet of goods has arrived in a warehouse. Usually, the range is no more than a few feet.

The chips can be incorporated into a range of products and have an advantage over barcodes in not requiring a line of sight between the chip and the reader. They offer a means of navigating complex global supply chains, allowing companies to track their products from factory to distribution centre, from warehouse to sales floor.

The decision taken by leading global retailers to mandate use of RFID by their suppliers, aided by the emergence of global technical standards, has eliminated any doubt that the technology will be used on a broad scale, says a report by the economist intelligence unit (EIU) released in early 2006. Pilot programmers in retail, consumer goods, logistics, life sciences, automotive, and government are under way and are already producing tangible benefits such as reduced costs, better inventory control, and improved responsiveness to consumer demand.

The supply chain is becoming smarter as a result of the technology, with companies such as Wal-Mart, Tesco, and Gillette using it to track inventory and improve stock replenishment. But to fulfill its potential, the technology needs to be integrated into operational management tools such as enterprise resource planning (ERP) software. It highlights RFID’s role as a catalyst for much greater collaboration between companies along the supply chain.

For example, it says a retailer referring to a specific product with one numbering system and a department store that refers to that same product—but with a different numbering system—has no idea that each is selling the same item. By utilizing RFID technology, the two companies could change that situation by sharing consistent data that would allow collaboration through purchasing, development, and promotion of the product.

Outside of the supply chain, a range of other applications are emerging, especially in applications that enhance customer convenience, such as “contactless payment” systems. Another growth area will be in identifying and authenticating people or items for safety or security purposes, such as within passports or to verify a patient’s identity at the operating table.

But there are concerns that such applications will breach the privacy rights of individuals and threat the security of both organizations and individuals. There are also a range of technical, business, and political barriers to RFID’s development.

To avoid being off the pages limit, this article wants to focus on the critical privacy risks to individuals by RFID. Then, it discusses feasible legal and technical solutions to RFID with some emphasis on the former, i.e., selective current legislative developments in different jurisdictions, to provide companies with insight on what compliance with legislations may entail and to assist companies in possible self-regulation to address these concerns as well. Finally, this article presents its conclusion and suggestion aiming at a healthy and sound atmosphere to RFID’s development.


4.2 Privacy Concerns to RFID


While RFID technology has the potential to provide numerous benefits and opportunities for businesses, it also raises concerns for consumers regarding the privacy of their personal information. Although privacy concerns may be premature given current RFID technology and limited adoption of this technology, there has already been considerable debate regarding privacy and security of personal information and the measures necessary to safeguard personal information.

For instance, Paula Bruening, Staff Counsel at advocacy group the Center for Democracy and Technology, warned at a U.S. Department of Commerce workshop on RFID on April 6, 2005, that RFID is one example of a growing trend toward businesses collecting and using their customers’ personal data.

Bruening also pointed out: while most current forms of RFID are not capable of compromising privacy by doing things such as tracking customers’ movements, the technology is rapidly moving forward and may soon catch up to consumer and privacy advocates’ fears.

In essence, privacy advocates have said that RFID uses small processors and antennas that are integrated into a paper or plastic label. Those chips can then be read by an electronic scanner, and unlike barcodes, RFID chips withstand dirt and scratches. As the range of RFID scanning grows beyond the current 25 ft (7.6 m), RFID could allow corporations and governments to track people’s movements and purchases.

But representatives of RFID technology vendors including Texas Instruments and Microsoft, along with users PepsiCo and General Motors, talked of the potential for RFID to revolutionize the way companies manage their inventories, fight counterfeiters, and stop shoplifters.

Generally, privacy concerns regarding adoption of RFID technology include (among others) the following: