Vermont Senator Patrick Leahy has called for congressional hearings to discuss the issue of Radio Frequency Identification technology and whether federal legislation should be enacted to protect consumers’ privacy.

“The RFID train is beginning to leave the station,” he said last week during a conference on video surveillance held at Georgetown University Law Center. “And now is the time to begin a national discussion about where, if at all, any lines will be drawn to protect privacy rights.”

The hearings are not likely to be held during this session of Congress because of the limited time available, a spokesperson at his office said.

He cited several retail tests that he termed “clandestine,” including one at Wal-Mart with Procter & Gamble and one with Gillette. In the P&G test, tags inserted into lipsticks were monitored by cameras so the brand—hundreds of miles away—could determine the accuracy of the inventory reports generated by the computer chips. The Gillette test involved razors, he said.

“The need to draw some lines is already becoming clear,” the Democratic Senator said. “These excesses suggest that Congress may need to step in at some point.”

He acknowledged that the technology “may be a good idea for a retailer to use to manage inventory,” but said that the tags should not be put on goods for sale without the consumer’s knowledge, without knowing how to deactivate them and without knowing what information would be collected and how it would be used and safeguarded. He referred to the RFID tracking devices as “surveillance” technology.

Meanwhile, testing by many consumer packaged goods companies and retailers is well underway. These companies hope to save millions of dollars by automating the retail supply chain and preventing theft via RFID tags. Tests include imbedding the chips in pallets and cases to track the flow and inventory of goods. An initial plan to track individual packages was squashed after privacy advocates cried foul.

Ken Harris, a partner at Cannondale Associates in Evanston, IL, said the privacy issue is not going away anytime soon.

“Somewhere between hyperbole and real concern is the truth on this issue, as far as the politicians are concerned,” he said. “The idea of Big Brother watching you makes great theater; the reality is RFID in its current form really doesn’t provide manufacturers or retailers with the opportunity to do that. But the concern for privacy is at an all-time high, so retailers and manufacturers need to be responsive to the concerns.”

Wal-Mart is requiring its top 100 manufacturers to implement the use of the technology by January 2005, however, it has been forced to make certain accomodations as it works to roll out the program. For example, Wal-Mart revised it schedule for drug makers that could not meet a March deadline to the end of June, The New York Times reported yesterday. Wal-Mart has already signed up at least 138 manufacturers to particpate in RFID tagging and it plans to require that all suppliers tag cases and pallets by the end of 2006. Other retailers, including Metro AG and Albertsons are following suit.

At least three states—California, Missouri and Utah—introduced bills related to privacy concerns with RFID.

Earlier this month, Senator Debra Bowen (D-Redondo Beach, CA) proposed legislation to set privacy standards for RFID technology. She too cited the Wal-Mart test with Procter & Gamble to determine if the real-time data P&G received from the on-shelf inventory was accurate. P&G has said that it was not their intention to violate consumers’ privacy.

“There is no downside to a public dialogue about these issues, but there are many dangers in waiting too long to start,” Leahy said. “We need clear communication about the goals, plans and uses of the technology, so that we can think in advance about the best ways to encourage innovation, while conserving the public’s right to privacy.”

Vermont Senator Patrick Leahy has called for congressional hearings to discuss the issue of Radio Frequency Identification technology and whether federal legislation should be enacted to protect consumers’ privacy.

“The RFID train is beginning to leave the station,” he said last week during a conference on video surveillance held at Georgetown University Law Center. “And now is the time to begin a national discussion about where, if at all, any lines will be drawn to protect privacy rights.”

The hearings are not likely to be held during this session of Congress because of the limited time available, a spokesperson at his office said.

He cited several retail tests that he termed “clandestine,” including one at Wal-Mart with Procter & Gamble and one with Gillette. In the P&G test, tags inserted into lipsticks were monitored by cameras so the brand—hundreds of miles away—could determine the accuracy of the inventory reports generated by the computer chips. The Gillette test involved razors, he said.

“The need to draw some lines is already becoming clear,” the Democratic Senator said. “These excesses suggest that Congress may need to step in at some point.”

He acknowledged that the technology “may be a good idea for a retailer to use to manage inventory,” but said that the tags should not be put on goods for sale without the consumer’s knowledge, without knowing how to deactivate them and without knowing what information would be collected and how it would be used and safeguarded. He referred to the RFID tracking devices as “surveillance” technology.

Meanwhile, testing by many consumer packaged goods companies and retailers is well underway. These companies hope to save millions of dollars by automating the retail supply chain and preventing theft via RFID tags. Tests include imbedding the chips in pallets and cases to track the flow and inventory of goods. An initial plan to track individual packages was squashed after privacy advocates cried foul.

Ken Harris, a partner at Cannondale Associates in Evanston, IL, said the privacy issue is not going away anytime soon.

“Somewhere between hyperbole and real concern is the truth on this issue, as far as the politicians are concerned,” he said. “The idea of Big Brother watching you makes great theater; the reality is RFID in its current form really doesn’t provide manufacturers or retailers with the opportunity to do that. But the concern for privacy is at an all-time high, so retailers and manufacturers need to be responsive to the concerns.”

Wal-Mart is requiring its top 100 manufacturers to implement the use of the technology by January 2005, however, it has been forced to make certain accomodations as it works to roll out the program. For example, Wal-Mart revised it schedule for drug makers that could not meet a March deadline to the end of June, The New York Times reported yesterday. Wal-Mart has already signed up at least 138 manufacturers to particpate in RFID tagging and it plans to require that all suppliers tag cases and pallets by the end of 2006. Other retailers, including Metro AG and Albertsons are following suit.

At least three states—California, Missouri and Utah—introduced bills related to privacy concerns with RFID.

Earlier this month, Senator Debra Bowen (D-Redondo Beach, CA) proposed legislation to set privacy standards for RFID technology. She too cited the Wal-Mart test with Procter & Gamble to determine if the real-time data P&G received from the on-shelf inventory was accurate. P&G has said that it was not their intention to violate consumers’ privacy.

“There is no downside to a public dialogue about these issues, but there are many dangers in waiting too long to start,” Leahy said. “We need clear communication about the goals, plans and uses of the technology, so that we can think in advance about the best ways to encourage innovation, while conserving the public’s right to privacy.”