RFID scare stories ignore basic physics, says analyst

Privacy advocates warn that radio frequency identification (RFID) technology could be used to track our movements and there have been calls for a boycott. But IT analysts at META Group say the scare stories ignore common sense, practicality and basic physics.

RFID tags consist of 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 ringing up a purchase or ordering more stock.

The tags have already been used in retail. Tesco trialled the tags in Gillette razor blade packaging in its Cambridge store; Marks & Spencers tested them to assist with stock control; and, more significantly, Wal-Mart is demanding that all of its suppliers use RFID tags by 2005.

But pressure groups are worried by the technology, which is widely expected to replace the bar code.

Such is the concern that, in November, thirty consumer, privacy and civil liberties groups issued a statement calling on manufacturers and retailers "to agree to a voluntary moratorium on the item-level RFID tagging of consumer items until a formal technology assessment process involving all stakeholders, including consumers, can take place."

But the concern is misplaced, says META Group. Tags used for product tracking do not have the data capacity to track or collect "intrusive levels of personal information from individuals".

According to META Group analyst Jack Gold, "The range of these tags is only a few feet at most, and they do not contain any personally identifiable information." Dismissing what he called a "common urban legend," his report adds that the target price point of $0.10 per tag "ensures that range and data capacity will remain low."

There are problems from a data collection perspective, too. The amount of data produced by existing collectors such as reward cards indicates that tags would generate such a huge of amount of data that it would be difficult to use it properly.

Analyst Gene Alvarez commented, "It takes trillions of pieces of data to put together a picture of buying patterns for a store on an individual-consumer basis". He added, "The real value is for the individual stores to make effective use of it."

Further, in a practical sense, the tags could not be used for surveillance without the installation and use of vast numbers of readers. The tags might be cheap - but the readers are not and, says the article, it would be hard to justify the expense.

The same considerations apply to retailers pondering whether to implement the technology in-store. But most companies are looking to their technical departments to take control of RFID implementation. According to META Group's Bruce Hudson, this is shortsighted. He comments:

"By viewing RFID as a technology project rather than an enterprise-wide initiative, companies are putting their brands at risk. Particularly for item-level tagging, these projects need to be run by the line of business, with legal, PR, and marketing input from the beginning. The mistrust surrounding RFID is similar to that around the 'cookie' at the beginning of e-business. A lot of fuss about nothing."

META Group's conclusion is that those concerned about the privacy implications of RFID should look to the practicalities rather than "groundless statements by professional doomsayers", while businesses should look beyond the technology to the return on investment it may or may not bring.