EC issues RFID privacy guidance… 

A set of what it terms ‘strong recommendations’ have been issued by the European Commission to make sure people and organisations involved in the design or operation of technology using smart chips respect the individual's fundamental right to privacy and data protection.

According to EC estimates there are already over 6bn smart chips, or radio tags, microelectronic devices that can be integrated into a variety of everyday objects from fridges to bus passes. With radio frequency identification (RFID) technology, they can process data automatically when brought close to 'readers' that activate them, pick up their radio signal and exchange data with them.

“A promising technology for the future, smart chips can make life simpler in all sorts of ways. There is clear economic potential in using small, smart chips to allow communication between objects,” said redoubtable EU Commissioner for Information Society and Media Viviane Reding, returning to the subject of privacy (click). “But Europeans must never be taken unawares by the new technology. European consumers must be confident that if and when their personal data is involved, their privacy will be impregnable also in a changing technological environment. The Commission therefore wants RFID technology to empower consumers to control their data security, which is the best way to make sure it is an economic success.”

The Commission's principles include:
·         consumers should be in control whether products they buy in shops use smart chips or not. When consumers buy products with smart chips, these should be deactivated automatically, immediately and free-of-charge at the point of sale, unless the consumer explicitly opts-in by asking to keep the chip operational. Exceptions can be granted to avoid unnecessary burden on retailers, for example, but only after an assessment of the chip's impact on privacy
·         companies or public authorities using smart chips should give consumers clear and simple information so that they understand if their personal data will be used, the type of collected data (such as name, address or date of birth) and for what purpose. They should also provide clear labelling to identify the devices that 'read' the information stored in smart chips, and provide a contact point for citizens to obtain more information
·         retail associations and organisations should promote consumer awareness on products containing smart chips through a common European sign to indicate whenever a smart chip is used by a product
·         companies and public authorities should conduct privacy and data protection impact assessments before using smart chips. These assessments, reviewed by national data protection authorities, should ensure that personal data is secure and well protected

EU Member states now have two years to inform the Commission on the steps they intend to take to make sure that the objectives of the recommendation are met. Within three years, the Commission will report on the recommendation's implementation, including an analysis of its impact on companies and public authorities using smart chips as well as its impact on citizens.

On the right track
The EC reports that some 2.2bn RFID tags, such as the ones used at toll booths or to identify shipping containers, were sold worldwide in 2008, roughly a third of these in Europe. The organisation estimates the worldwide market value for RFID tags was €4bn in 2008 and could grow to about €20bn by 2018.

Also tracking RFID markets is ABI Research. In that company’s recent ‘Semi-Annual RFID Market Data’ analysis the suggestion is that despite the weakened state of the world economy RFID markets are not contracting: at worst they are growing at a slower rate. ABI says positive signs are beginning to appear, and forecasts indicate that, even with the ailing automotive vertical included, the RFID market should see 11% growth between 2009 and 2010. Remove the deeply depressed automotive immobiliser numbers which are directly tied to vehicle production, and the growth rate jumps to almost 16%.

“Transponders, readers, software, and services are all showing healthy growth,” says practice director Michael Liard. “The most robust applications include contact-less ticketing, contact-less payments (particularly in North America and Europe), item-level tracking in fashion apparel and footwear, asset management (not only corporate assets, but also returnable transport items, tools/parts, and work-in-process), baggage handling, real-time location systems (RTLSs), and electronic identification documents.”

While the last-mentioned application, e-ID documents, showed some decline in 2008 to 2009 as a result of the winding down of China ’s national ID card programme, ABI believes the sector should rebound in 2010 due to increased numbers of passports being issued by dozens of national governments. Other high-profile government e-ID initiatives include border crossing cards, RFID-enabled driver’s licences, and electronic vehicle registration (EVR).

ABI also reckons retail is looking forward to a boom in contact-less payment cards in the US , to be followed soon afterwards by Europe . Meanwhile asset tagging will show strong uptake particularly in corporate finance and banking, healthcare, and manufacturing environments, as well as in new areas such as energy, utilities and gaming, and with continuing expansion in traditional rental asset management - library books, media, laundry, for example.)

“Based on sales growth pipeline conversations, our end user research, and RFID revenues reported to ABI, 2009 will likely not be as bad as many thought,” says Liard. “Key economic and industry indicators point to stronger growth in 2010, especially the second half.”
John Williamson