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Is Privacy RFID’s Achilles Heel?

Is Privacy RFID’s Achilles Heel?. There is growing evidence that RFID opponents are winning the war against radio frequency identification. INTRODUCTION. Mark Roberti Founder and Editor RFID Journal Mroberti@rfidjournal.com. PRESENTATION SUMMARY. The item-level opportunity

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Is Privacy RFID’s Achilles Heel?

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  1. Is Privacy RFID’s Achilles Heel? There is growing evidence that RFID opponents are winning the war against radio frequency identification AIDC 100 — Oct. 5, 2006

  2. INTRODUCTION Mark Roberti Founder and Editor RFID Journal Mroberti@rfidjournal.com AIDC 100 — Oct. 5, 2006

  3. PRESENTATION SUMMARY • The item-level opportunity • Losing the battle for hearts and minds • The industry’s response • Capitulation! • Factors contributing to RFID’s problems • Why we can’t be complacent • What we can do to address the problem AIDC 100 — Oct. 5, 2006

  4. 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 AIDC 100 — Oct. 5, 2006

  5. 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 AIDC 100 — Oct. 5, 2006

  6. LOSING THE BATTLE But the opportunity is slipping away . . . AIDC 100 — Oct. 5, 2006

  7. 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 Center’s RFID page ranks 10th AIDC 100 — Oct. 5, 2006

  8. 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 AIDC 100 — Oct. 5, 2006

  9. LOSING THE BATTLE Media coverage is overwhelmingly negative • “At item-level tagging, you have actual linkage [to a consumer’s 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 AIDC 100 — Oct. 5, 2006

  10. LOSING THE BATTLE Wired Magazine Calls Katherine Albrecht, founder of CASPIAN, RFID’s Erin Brockovich AIDC 100 — Oct. 5, 2006

  11. 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 Amazon’s Movers & Shakers list • #6 on Amazon’s Non-Fiction Bestseller list • #15 on Amazon’s Daily Sales list AIDC 100 — Oct. 5, 2006

  12. INDUSTRY RESPONSE • 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 EPCglobal has: AIDC 100 — Oct. 5, 2006

  13. INDUSTRY RESPONSE • Created a label for tagged products • Begun developing best practices • Produced an educational video • Published a position paper • Done media tours to educate journalists AIM Global has: AIDC 100 — Oct. 5, 2006

  14. INDUSTRY RESPONSE • Created best practices • Lobbied against RFID bills • Spoken positively about RFID in the media • Supported AIM and EPCglobal initiatives Other companies/groups have: AIDC 100 — Oct. 5, 2006

  15. INDUSTRY RESPONSE • 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 Item-level RFID is taboo AIDC 100 — Oct. 5, 2006

  16. INDUSTRY RESPONSE These efforts are FAILING! AIDC 100 — Oct. 5, 2006

  17. 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.” AIDC 100 — Oct. 5, 2006

  18. CONTRIBUTING FACTORS How could this be? AIDC 100 — Oct. 5, 2006

  19. 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 P&G, Wal-Mart • Feb. 2005: Brittan Elementary School District in Sutter, Ca., is forced to drop plans to use RFID to take attendance AIDC 100 — Oct. 5, 2006

  20. 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 AIDC 100 — Oct. 5, 2006

  21. CONTRIBUTING FACTORS • Enron • WorldCom • Global Crossing • Parmalat • Adelphia Recent business scandals have contributed to a negative opinion of businesses • El Paso Energy • ImClone • Cendant • Sunbeam • Royal Ahold AIDC 100 — Oct. 5, 2006

  22. CONTRIBUTING FACTORS • The U.S. Patriot Act • Tapping international calls • Using SWIFT data on transactions • JetBlue handing over passenger data The war on terror has kept the issue of privacy and freedoms in the headlines AIDC 100 — Oct. 5, 2006

  23. WHY WE CAN’T BE COMPLACENT • “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 Will the problem go away? AIDC 100 — Oct. 5, 2006

  24. WHY WE CAN’T BE COMPLACENT • 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 What if it doesn’t? AIDC 100 — Oct. 5, 2006

  25. WHY WE CAN’T BE COMPLACENT • 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 RFID may be the next “frankenfood” AIDC 100 — Oct. 5, 2006

  26. WHAT WE CAN DO We have to try! AIDC 100 — Oct. 5, 2006

  27. WHAT WE CAN DO • Sustained PR effort • Consistent response to irresponsible media articles • Education of journalists and other influencers • Present a united front It’s time to focus on the consumer AIDC 100 — Oct. 5, 2006

  28. WHAT WE CAN DO • 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 How we can get this done? AIDC 100 — Oct. 5, 2006

  29. WHAT WE CAN DO Get end users to commit totruly protecting consumer privacy AIDC 100 — Oct. 5, 2006

  30. CONTACT INFORMATION Thank you Mark Roberti Founder & Editor RFID Journal mroberti@rfidjournal.com AIDC 100 — Oct. 5, 2006

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