EC probes retail tagging amid fears of 'low trust and ID theft'

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The increasing use of electronic tags to monitor items as diverse as groceries, clothing and aircraft parts is to be probed by the European Commission.

The Information Society and Media Commissioner, Viviane Reding, has announced a public consultation on the use of radio frequency identification (RFID) tags, reflecting widespread concerns about invasion of privacy.

The tags, which can be read remotely with radio-based scanners, are being used by retailers such as Marks & Spencer to track consignments during the distribution process. The company has also experimented with RFID tags on suits in some of its stores.

In Germany, the retailer Metro has a "store of the future" to test the tags. And every removable part on the new Airbus 380 airliner will be fitted with an RFID tag.

But the tags have also met with public opposition, mostly because of privacy worries. Replacing bar codes with RFID gives retailers and manufacturers far more information about a product. But the same information could provide a highly detailed map of consumers' behaviour, from what they buy to where and how often they buy it, and even where they dispose of the packaging. As RFID is radio based, privacy groups have expressed concerns that companies or governments could read the tags without consumers' knowledge.

Ms Reding told delegates to the CeBIT technology fair in Hanover, Germany, that the number of RFID tags in use will increase "several thousand times" over the next decade. Europe could be a leader in developing their use, she added, but only if European governments moved quickly to harmonise the radio spectrum available for RFID systems. "RFID tags should be mobile by nature and should be able to operate anywhere in the world," she said.

But the Commissioner also warned the IT industry not to overstep the mark. "The European Commission shares concerns about a future of ubiquitous surveillance, low trust and identity theft," she said. "We need to ask what information RFID systems gather, how long that data will be kept and who will have access to it. The Commission believes that a public consultation is needed to find the right balance between privacy and the public interest."

Analysts believe the Commission should order a consultation. "A broad dialogue on RFID is valuable because surveys show that consumers have significant concerns, especially about privacy," said Nick Jones, a vice-president at Gartner, the technology research firm.

The Commission expects to publish an official communication on RFID this year, ahead of its review of the European e-privacy directive.