Commercial Tracking Chips Spark Privacy Debate

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Richard Morrison, 202.331.2273


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Washington, D.C., June 21, 2004—In a study published today by the Competitive Enterprise Institute, privacy advocate James Harper examines concerns centering around a new technology that companies have begun using to electronically track sales and product inventory.  The Federal Trade Commission will also be conducting a workshop throughout the day to accept public testimony on the privacy implications of this new technology, the Radio Frequency Identification (RFID) tag.


The initial deployment of these tiny devices, envisioned as a cheap and efficient replacement for bar codes, has caused some to wonder if consumer privacy could be threatened by retailers tracking the tags’ transmissions.  Harper addresses these concerns, and suggests ways in which competitive pressures and consumer demands will solve potential problems far better than the government intervention some advocates have called for.


“Vendors employing RFID tags face economic incentives and consumer preferences that will tend to direct the technology’s evolution in harmony with consumer interests,” said Harper.   “Meanwhile, consumers’ easy access to defensive techniques and counter-technologies will compliment existing laws that already protect privacy.”


In addition, consumers stand to see substantial benefits from wide-scale deployment of RFID tags and the efficiencies they will create.  Cheaper prices—thanks to lowered shipping and warehousing costs – and added convenience at checkout aisles are merely the most obvious advantages this technology will bring to the market.


The text of James Harper’s CEI OnPoint #89, “RFID Tags and Privacy: How Bar-Codes-on-Steroids are a 98-Pound Weakling,” is available from the CEI web site (please click here).  More information on consumer privacy issues can be found at James Harper’s website, www.