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Radio Frequency Identification Devices (RFID): Frequently Asked Questions

European Commission - MEMO/06/112   09/03/2006

Other available languages: none

MEMO/06/112

Brussels, 9 March 2006

Radio Frequency Identification Devices (RFID): Frequently Asked Questions

Why is RFID on the European Commission agenda?

Few new technologies have triggered so much attention from consumer organisations and politicians around the world as Radio Frequency Identification Devices. The place taken by RFID in the public debate today largely derives from the fact that this technology is moving rapidly from the research lab to mass applications in a similar way to GSM mobile phones in the 1990s.

First of all, the Commission welcomes the fact that RFID is an emerging technology that has great potential for many economic operators in Europe – and also for European citizens. Research must be pursued in this area to build and maintain Europe’s leadership in the next generation of the RFID technology and its applications. However, RFID technology development should not be considered an end in itself. We expect RFID to be the forerunner of many increasingly “intelligent” objects that interact with each other and help humans in ever more sophisticated ways.

The RFID market is expected to grow fast over the next ten years. Cumulative sales of RFID tags for sixty years until the beginning of 2006 amount to 2.4 billion, with 600 million tags being sold in 2005 alone! The number of tags delivered in 2016 could be over 450 times the number delivered in 2006. If the main technical and economic challenges are resolved in the near future (e.g. yield vs. cost, frequency acceptance, required performance levels), the global RFID market might grow exponentially to be almost ten times the size in 2016 that it will be this year.

In Europe, RFID take-up growth for the next 7 years is expected to be significant in terms of the number of tags (multiplied by a factor of 6), the number of readers (multiplied by a factor of 15), and the number of locations (multiplied by a factor of 15).

The deployment of RFID technology should make a major contribution to growth and jobs. Indeed it will significantly improve product quality, reduce fixed asset costs and stocks by 5%, improve sales by 3%, reduce labour costs in physical product movement by 65%, and generate a 45% annual growth for RFID technology and application providers. Furthermore, RFID implementations are expected to become a source of new business models and a creator of high-tech quality jobs.

Is there a role for the European Commission in the debate?

The European Commission’s role is to help build a cross-society consensus on technical, legal and ethical issues associated with RFID and to intervene, where required, with regulatory instruments. The issues which need to be addressed include privacy, radio spectrum allocation, and the interoperability of systems, not least across EU borders.

On privacy, RFID is generating a number of important questions, such as: how do we credibly ensure that RFID tags are not abused to invade the privacy of consumers? Do we need to destroy an RFID tag when it could be useful for self-configuring products (built from autonomous components and assemblies), automating warranty checks etc.?

In addition to privacy, the interoperability debate and the availability of radio frequency spectrum are also important. We very much need a common approach throughout Europe, so as to ensure that individual EU Member States do not opt for incompatible solutions which ultimately would be detrimental to everyone. For example, because Europe lacks a common frequency range for ultra-high frequency (UHF) tags, electronic invoicing is possible within each country, but e-invoicing systems will not work across borders.

Also a sector-specific approach, such as common EU guidelines that set out minimal requirements for different RFID applications (such as healthcare or government), might be helpful both for industry and citizens in Europe. The Commission can act as an honest broker in helping to draw up such guidelines, in agreement with EU Member States and other stakeholders.

Why not leave the initiative completely to the private sector?
The private sector, however well-intentioned, cannot clear all the roadblocks slowing the introduction of RFID. Examples include the need for a common European technical standard to ensure that RFID systems can work together, and the lack of a radio frequency allocation common to all EU Member States.

Suitable standards for RFID are crucial to its successful introduction. The Commission relies on standards proposed by the existing standardisation bodies in Europe, such as CEPT and ETSI for frequency spectrum allocation and CEN and ISO for interoperability. It counts on self-regulation and industry-wide agreements to remove the remaining obstacles.

What are the next steps?

The Commission hopes to initiate a broad public debate on all aspects of RFID technology and its applications, to pave the way for their smooth introduction and ensure that Europe derives the maximum possible economic and social benefit. This exercise starts at the CeBIT trade fair in March and stakeholder contributions will help shape a final Commission communication scheduled for the third quarter of 2006.

More information on the public debate can be found at:

http://ec.europa.eu/information_society/policy/rfid/ .

In addition, as today’s RFID tags will gradually migrate into large scale, interoperable and distributed wireless networks of objects and devices, collaborative research for the area should be provided for in the EU’s forthcoming seventh framework programme for R&D (FP7).

How important is the international dimension of the debate on RFID?

Many of the interesting RFID application areas are not limited to the European Union. Each day we ship large amounts of goods to (and from) the US and Asia, so common standards and rules would be more than welcome. Europe and its key trading partners have a clear mutual interest in this area.

The Commission participates in an international RFID forum, which is beginning to get results. The EU-US summit Declaration of June 2005 encourages joint measures to accelerate the deployment of key innovative technologies such as radio frequency identification devices. Similar communication channels will be established with other countries, in particular in Asia, during 2006.

What does Europe do today to ensure the privacy of its citizens?

There is a strong concern that the large-scale use of RFID technology may breach the consumer’s right to privacy. It is therefore not surprising that many consumer protection organisations have been very active in alerting consumers.

The European Commission has long been aware of civil rights concerns to do with information and communication technologies. EU law addresses these concerns in various instruments including the Directive on the protection of individuals with regard to the processing of personal data and the free movement of such data (95/46/EC) of 1995 and the so-called “e-Privacy” Directive on the processing of personal data and the protection of privacy in the electronics communications sector (2002/58/EC) of 2002. The Commission will hold in the course of the year 2006 a specific workshop on privacy and security aspects of RFID to identify real privacy concerns and try to build consensus on effective and balanced answers. If necessary, additional RFID-related privacy concerns could be addressed in the review of the e-privacy Directive.

What regulatory levers does the Commission have to accelerate the take-up of RFID?

The deployment of RFID applications may require a regulatory environment supporting European companies in their investment efforts as well as the general public in its call for protection of personal data and privacy.

Privacy

The “article 29 working party on the implementation of the Data protection directive” has produced recently a paper on data protection issues related to the RFID technology. This paper can be found at: http://ec.europa.eu/justice_home/fsj/privacy/docs/wpdocs/2005/wp111_en.pdf

The existing Directives, in particular the “e-Privacy” Directive, already address the need for harmonised, balanced provisions concerning the protection of personal data and privacy. The Commission will investigate if and to which extent the provisions of these Directives should be modified to address the rights and freedoms of natural persons confronted with RFID.

Radio spectrum

The main issue applies to regulations in Europe for using RFID technology operating at Ultra High Frequency (UHF) in the band of 860 to 960 MHz. In September 2004, the European Telecommunications Standards Institute (ETSI) published European Standard EN 302 208. The European Conference of Postal and Telecommunications Administrations (CEPT) published an update to ERC Recommendations 70-03 on Short Range Devices in October 2004. This new regulation is recognised as a significant improvement over previous UHF regulations. However, in order to provide for a consistent RFID environment throughout the European Union, the Commission is considering the need to apply its regulatory powers to ensure that all 25 countries implement this regulation without further delay.


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