California State Senator Introduces Bill To Regulate RFID Use

California state Sen. Debra Bowen has introduced legislation to regulate the use of radio-frequency identification technology.

The bill, introduced Tuesday, outlines three requirements for any business using an RFID system that can track products and people. The business must tell customers it's using an RFID system and get express consent before tracking and collecting any information. The bill also says companies must detach or destroy any RFID tags that are attached to a product offered for sale before the customer leaves a store.

The proposed legislation is designed to protect consumers' privacy. In a statement Bowen, a Democrat from Los Angeles County, said, "the privacy impact of letting manufacturers and stores put RFID chips in the clothes, groceries, and everything else you buy is enormous."

RFID is a fast-growing technology, sparked by mandates from Wal-Mart, the Department of Defense, several European retailers, and, most recently, Target, that suppliers begin using RFID in the next year. In a research note released Wednesday by research firm Allied Business Intelligence, the market for RFID hardware, software, and integration services is expected to exceed $7 billion by 2008.

U.S. trials and mandates involving the use of RFID tagging currently are confined to using the technology in warehouse and distribution processes to track pallets and cases, not individual items on store shelves. Only German retailer Metro Group AG has said it intends to use RFID along its entire supply chain and in 250 stores in November.

But privacy advocates are concerned that as RFID matures and becomes more pervasive, it could be used to collect data on unknowing consumers, and become a kind of Big Brother technology. In the statement disclosing the proposed legislation, Bowen said "There's no reason to let RFID sneak up on us when we have the ability to put some privacy protections in place before the genie's out of the bottle."