European Commission Issues Privacy Rules for Smart Chips

The European Commission says that it has adopted a set of recommendations to make sure that everyone involved in the design or operation of technology using smart chips respects the individual's fundamental right to privacy and data protection.

"A promising technology for the future, smart chips can make life simpler in all sorts of ways. We are talking about everyday objects suddenly becoming smart by connecting to a network and exchanging information. Think of smart-fridges that inform you your milk is past its use-by date or smart-food packaging warning parents about possible allergies," said Viviane Reding, EU Commissioner for Information Society and Media.

"There is clear economic potential in using small, smart chips to allow communication between objects. But Europeans must never be taken unawares by the new technology. This is why the Commission issued strong recommendations to the industry today. European consumers must be confident that if and when their personal data is involved, their privacy will be impregnable also in a changing technological environment. The Commission therefore wants RFID technology to empower consumers to control their data security, which is the best way to make sure it is an economic success. After all, the European share of the global smart chips market will reach 35% in the next eight years."

The Commission says that consumers should be in control whether products they buy in shops use smart chips or not. When consumers buy products with smart chips, these should be deactivated automatically, immediately and free-of-charge at the point of sale, unless the consumer explicitly opts-in by asking to keep the chip operational. Exceptions can be granted to avoid unnecessary burden on retailers, for example, but only after an assessment of the chip's impact on privacy.

Companies or public authorities using smart chips should give consumers clear and simple information so that they understand if their personal data will be used, the type of collected data (such as name, address or date of birth) and for what purpose. They should also provide clear labelling to identify the devices that 'read' the information stored in smart chips, and provide a contact point for citizens to obtain more information.

2.2 billion RFID tags, such as the ones used at toll booths or to identify shipping containers, were sold worldwide in 2008, roughly a third of these in Europe. The worldwide market value for RFID tags is estimated to be of €4 billion in 2008 and to grow to about €20 billion by 2018.

Posted to the site on 12th May 2009