Is Privacy RFIDs Achilles Heel

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Is Privacy RFIDs Achilles Heel?

• There is growing evidence that RFID opponents are
  winning the war against radio frequency
  identification

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INTRODUCTION

• Mark Roberti
• Founder and Editor
• RFID Journal
• Mroberti_at_rfidjournal.com

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PRESENTATION SUMMARY

• The item-level opportunity
• Losing the battle for hearts and minds
• The industrys response
• Capitulation!
• Factors contributing to RFIDs problems
• Why we cant be complacent
• What we can do to address the problem

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THE ITEM-LEVEL OPPORTUNITY

• Item-level tagging represents the biggest
  opportunity for vendors
• Global retail sales in 2005 8.7 trillion
• Assume an average price per item of 10
• 870 billion item tags
• Readers covering miles of shelving, in-store
  displays, racks and so on

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THE ITEM-LEVEL OPPORTUNITY

• Item-level tagging represents the biggest
  opportunity for end users
• Only item-level tagging will reduce
• Out-of-stocks
• Shrinkage
• Counterfeiting
• Unsaleable goods that have passed their
  expiration date

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LOSING THE BATTLE

• But the opportunity is slipping away . . .

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LOSING THE BATTLE

• Consider these facts
• Google returns 227,000 references to spychips
  up from 165,000 in August
• Spychips.com ranked 5th by Google when searching
  for RFID
• Electronic Privacy Information Centers RFID page
  ranks 10th

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LOSING THE BATTLE

• Media coverage is overwhelmingly negative
• "Oh, for the good old days when Big Brother
  merely watched you. Soon, he'll be coming home
  with you in what you buy, wear, drive and read.
  Consumer Reports, June 2006

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LOSING THE BATTLE

• Media coverage is overwhelmingly negative
• At item-level tagging, you have actual linkage
  to a consumers credit card information, since
  details of your purchase are archived along with
  your credit-card information and other
  particulars of your private life. Your details
  are even matched with those on file for your
  family and associates. Globe and Mail, July 2006

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LOSING THE BATTLE

• Wired Magazine Calls Katherine Albrecht, founder
  of CASPIAN, RFIDs Erin Brockovich

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LOSING THE BATTLE

• Consumers are listening
• Spychips How Major Corporations and Government
  Plan to Track Your Every Purchase and Watch Your
  Every Move

• 1 on Amazons Movers Shakers list
• 6 on Amazons Non-Fiction Bestseller list
• 15 on Amazons Daily Sales list

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INDUSTRY RESPONSE
EPCglobal has

• Created privacy guidelines
• Mandated a kill command
• Established a Public Policy Steering Committee
• Created a label required on tagged products
• Lent support to those opposing RFID bills

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INDUSTRY RESPONSE
AIM Global has

• Created a label for tagged products
• Begun developing best practices
• Produced an educational video
• Published a position paper
• Done media tours to educate journalists

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INDUSTRY RESPONSE
Other companies/groups have

• Created best practices
• Lobbied against RFID bills
• Spoken positively about RFID in the media
• Supported AIM and EPCglobal initiatives

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INDUSTRY RESPONSE
Item-level RFID is taboo

• Retailers are afraid to discuss item-level trials
  going on
• RFID Journal could not get a single U.S. apparel
  company to speak at our recent Apparel Footwear
  RFID Summit
• Companies are backing away from RFID

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INDUSTRY RESPONSE
These efforts are
FAILING!
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CAPITULATION!

• American Eagle Outfitters

• American Eagle currently does not use any RFID
  systems, either in supply chain management,
  consumer credit card or loyalty programs, or
  anywhere else within our operations. We highly
  value and respect our customers privacy. The
  fact that a vendor may have offered a system
  demonstration should not be interpreted as an
  intention on our part to adopt such a system in
  future.

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CONTRIBUTING FACTORS
How could this be?
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CONTRIBUTING FACTORS

• End users shoot themselves in the foot
• April 2003 Benetton is forced to issue a press
  release backtracking on RFID plans after CASPIAN
  calls for a boycott
• Nov. 2003 Chicago Sun Times exposes secret
  trial by PG, Wal-Mart
• Feb. 2005 Brittan Elementary School District in
  Sutter, Ca., is forced to drop plans to use RFID
  to take attendance

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CONTRIBUTING FACTORS

• More RFID debacles . . .
• Jan. 2004 Errant e-mail suggests GMA wants to
  smear Katherine Albrecht
• Feb. 2004 Metro drops RFID loyalty card after
  CASPIAN exposes that it was using RFID without
  informing customers
• May 2005 State Dept. agrees to additional
  protection for RFID passports after uproar

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CONTRIBUTING FACTORS
Recent business scandals have contributed to a
negative opinion of businesses

• Enron
• WorldCom
• Global Crossing
• Parmalat
• Adelphia

• El Paso Energy
• ImClone
• Cendant
• Sunbeam
• Royal Ahold

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CONTRIBUTING FACTORS
The war on terror has kept the issue of privacy
and freedoms in the headlines

• The U.S. Patriot Act
• Tapping international calls
• Using SWIFT data on transactions
• JetBlue handing over passenger data

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WHY WE CANT BE COMPLACENT
Will the problem go away?

• We had many of the same privacy concerns with
  bar codes. They will go away when people get more
  comfortable with the technology. Auto-ID
  industry veteran

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WHY WE CANT BE COMPLACENT
What if it doesnt?

• The European Union requires labels on most
  genetically modified foods
• European consumers have generally rejected
  genetically modified foods
• The debate over genetically modified foods has
  led to an increase in sales of organic foods

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WHY WE CANT BE COMPLACENT
RFID may be the next frankenfood

• What can the industry do to stop this?
• Can we turn the tide of negative publicity?
• Can we convince people that vendors and end users
  are sincere about protecting their privacy?
• Can we convince people that RFID will deliver
  massive benefits to them, as well as to businesses

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WHAT WE CAN DO
We have to try!
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WHAT WE CAN DO
Its time to focus on the consumer

• Sustained PR effort
• Consistent response to irresponsible media
  articles
• Education of journalists and other influencers
• Present a united front

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WHAT WE CAN DO
How we can get this done?

• Form a small RFID Privacy Coalition
• Coordinate activities of AIM, EPCglobal, NRF,
  AAFA, etc.
• Sustain a PR campaign aimed at consumers
• Raise money to support the effort
• Hold events for journalists, influencers
• Get media savvy

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WHAT WE CAN DO
Get end users to commit totruly protecting
consumer privacy
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CONTACT INFORMATION
Thank you Mark Roberti Founder Editor RFID
Journal mroberti_at_rfidjournal.com