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By Alorie Gilbert, 19 August 2003 16:04

NEWS Technology and consumer privacy experts testifying at a California Senate hearing have called for regulation of the controversial tracking technology designed to wirelessly monitor everything from clothing to currency. The hearing, presided over by state senator Debra Bowen, focused on radio frequency identification (RFID) chips, which is being trialled by retailers and manufacturers in the UK and US and can detect the movement of products in shops and monitor inventory in warehouses. Proponents hail the technology as the next-generation bar code, allowing merchants and manufacturers to operate more efficiently and cut down on theft. But privacy activists worry the unchecked use of RFID could end up trampling consumer privacy by allowing retailers to gather unprecedented amounts of information about activity in their stores and link it to customer information databases. They also worry about the possibility that companies, governments and would-be thieves might be able to monitor people's personal belongings, embedded with tiny RFID microchips, after they are purchased. Bowen said: "How would you like it if, for instance, one day you realised your underwear was reporting on your whereabouts?" One witness at the hearing this week said that failing to impose conditions on the use of RFID technology could lead to a world not unlike the fictional society portrayed in Steven Spielberg's science-fiction thriller Minority Report. In that movie, set in 2054, iris scanning technology allows advertising hoardings to recognise people and display personalised ads that called out their names. It also allows law enforcement authorities to track people's whereabouts. Beth Givens, director of the Privacy Rights Clearinghouse, said: "There has been scant scrutiny by policymakers on RFID and pervasive computing. This hearing is an important first step." Givens urged Bowen to lead a study of RFID and its "profound privacy and civil liberties implications". She suggested that RFID be subjected to a set of fair-use guidelines. For instance, companies should be required to inform consumers about products containing RFID chips by clearly labelling them. Consumers should also have the right to permanently disable the chips upon purchasing such goods and companies should provide consumers with the information collected about them via RFID tracking systems upon request, said Givens. Other witnesses, including a representative from the consumer privacy group Electronic Frontier Foundation and a researcher from University of California at Los Angeles, called for limits on the use of RFID and a technology assessment by policymakers. Greg Pottie, an electrical engineering professor at UCLA, said: "It's possible to set up these systems so that there is no privacy anywhere. The time is right for an assessment of this technology." Katherine Albrecht, a vehement opponent of RFID technology, went further and suggested a moratorium on the commercial use of RFID technology until legal guidelines are set. Albrecht, who also testified Monday, is the head of Consumers Against Supermarket Privacy Invasion and Numbering. "I would personally like to see (RFID) go away," she said. But Dan Mullen, head of the trade group Association for Automatic Identification and Data Capture Technologies, said mass adoption of RFID chips for tracking merchandise in stores has yet to take off and may never do so. "There has to be a business case to put an RFID chip on a can of Coke," Mullen said. "When it comes down to it, there may not be a business case for anyone to do that," he said. Major retailers are just beginning to experiment with RFID. Tesco was selling Gillette razors with RFID chips embedded in them in a trial run of the technology at its Cambridge store. Wal-Mart had undertaken a similar test in a US store but cancelled it. Benetton is also studying how it wants to use RFID chips. Instead of introducing RFID to its store shelves, Wal-Mart is urging its top 100 suppliers to start attaching RFID chips to shipments of products they send to the retailer by 2005. And by the end of 2006, the company wants the rest of its suppliers, about 25,000, to begin doing the same, a Wal-Mart representative said. Wal-Mart says the chips will be used only on palettes and cases, not on the goods themselves. It will confine its use of the chips, for now, to warehouses and distribution centres, keeping them out of its stores and away from consumers. Bowen said that the introduction of legislation to control the use of RFID is "possible," but that she's not at the bill stage yet. Even if she were to draft a bill, it would not be her goal to outlaw RFID, she said. Bowen herself uses a special pet-tracking chip that uses RFID to keep tabs on her cats. Bowen said: "Is the goal of this hearing is to restrict the use of the technology? No. It's not our goal to create legislation that says this technology could never be used. It's to gain a better understanding." Policymakers in the UK are also starting to ponder the privacy implications of RFID, with an MP submitting a motion for debate on the regulation of RFID devices when the government returns from its summer recess next month. Alorie Gilbert writes for CNET News.com