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MEMO/06/378

Brussels, 16 October 2006

Radio Frequency Identification Devices (RFID): Frequently Asked Questions on the Commission’s Public Consultation

The European Commission today reports on the initial findings from its wide public debate on Radio Frequency Identification. At the ‘RFID – Heading for the Future’ conference in Brussels today, possible future policy options will be discussed with stakeholders from all over Europe and beyond.

Why this conference?

The EU RFID Conference 2006 ‘Heading for the Future’ closes the series of radio frequency identification (RFID) consultations launched by Viviane Reding, Commissioner for Information Society and Media, at CeBIT 2006.

Why is RFID on the European Commission’s agenda?

The Commission considers RFID as an emerging technology that has great potential for many economic operators in Europe as well as for Europe's citizens. Few new technologies have triggered so much attention from businesses, consumer organisations, data protection experts and politicians around the world as RFID Devices. The place taken by RFID in the public debate today largely derives from the fact that this technology is currently moving rapidly from the research lab to mass applications in a similar way to GSM mobile phones in the 1990s.

The RFID market is expected to grow rapidly over the next ten years. Cumulative sales worldwide of RFID tags for 60 years since their invention 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 – the value of the total market, including systems and services, could reach 20.8 billion euro in 2016 from 2.2 billion euro in 2006.

In Europe, RFID take-up growth for the next seven years is expected to be significant in the number of tags (by a factor of 6), the number of readers (by a factor of 15), and the number of locations (by a factor of 15). Yet the European RFID market is currently growing slower than the worldwide market.

The deployment of RFID technology should make a major contribution to growth and jobs. Furthermore, RFID implementations are expected to become a source of new business models and a creator of high-tech quality jobs.

At the same time, research must be pursued to build and maintain Europe’s lead in next-generation RFID technology and its applications. The Commission also expects RFID to be the forerunner of many increasingly “intelligent” objects that interact with each other and help humans in ever more sophisticated ways.

Why is the Commission involved in RFID? Why not leave it completely to the private sector?

The private sector is crucial for developing the technological and economic conditions for successfully introducing RFID technologies. But as the private sector cannot clear all the roadblocks, this could slow RFID introduction.

Examples include the need for a common European technical standard to ensure that RFID systems 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.

RFID also raises a number of public interest issues, including data protection and security. Here, there is a clear need to identify joint European responses to legitimate societal concerns. 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.? The Commission’s role here 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.

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 RFID applications in different sectors (such as healthcare or government), might be helpful for industry and citizens in Europe.

Why did the European Commission hold consultations on RFID?
The Commission launched this consultation process to give all stakeholders a chance to express their concerns. This will help the Commission to decide on the steps that Europe must take to seize the opportunities offered by RFID, and to address the complex issues of security and privacy that surround it. The results of the public consultation will feed into a Commission Communication to the Council and the European Parliament that the Commission intends to adopt at the end of 2006.

How did the European Commission organise this consultation?

As a first step, the European Commission held five workshops with experts and stakeholders from Europe and around the world on:

§ technological state of RFID development (6 and 7 March 2006);

§ economic and social rationale for RFID applications domains and emerging trends (15 and 16 May 2006);

§ RFI security, privacy, health and safety issues (16-17 May 2006);

§ RFID interoperability, standardisation, governance and Intellectual Property Rights (1 June); and

§ RFID radio frequency requirements (2 June 2006).

The workshops featured 128 distinguished speakers and attracted 623 external participants. In addition, remote access to the conference with web-streaming of the presentations and the possibility to submit questions was made available in four workshops (see http://ec.europa.eu/information_society/policy/rfid/workshops/index_en.htm).

To further the debate, an online public consultation asked stakeholders for their opinion on how the European Commission could ensure that the growing use of RFID boosts the competitiveness of Europe’s economy and improves quality of life. It was held on ‘Your Voice in Europe’ from 3 July until 30 September 2006 and enjoyed unexpected high participation from stakeholders in Europe and worldwide
(see http://ec.europa.eu/information_society/policy/rfid/consultation/index_en.htm ).

[ Figures and graphics available in PDF and WORD PROCESSED ]

What have been the key issues raised during the public consultation?

The key issues addressed in the debate so far have included: (i) the migration from today’s RFID tags to the vision of creating an ‘Internet of Things’ via networked RFID systems and services; (ii) emerging trends and opportunities in RFID application domains; (iii) RFID security, data protection and privacy, health and safety issues; (iv) interoperability, standardisation, governance, and intellectual property rights; and (v) radio frequency requirements for RFID.

Besides technical issues, the debate has highlighted the need to address key societal concerns. These include the privacy risks of collecting and using personally-identifiable information (e.g., data mismanagement, data misuse, lack of transparency, loss of freedom), but also the biological effects of radio frequency waves and the impact of RFID tags on packaging materials reuse and recycling.

The Commission's debate raised stakeholder awareness of the economic and social benefits of RFID technology, and identified policy options to respond to the citizens' specific concerns. The Commission is examining the need to promote a regulatory environment in which RFID users can develop robust, high-performance applications, but which at the same time ensures that the right to privacy is fully protected.

Did many participate in the Commission’s public RFID consultation?
The online public consultation, which the Commission launched on 3 July (see IP/06/909) and which ended on 17 September 2006, caught the attention of many citizens and organisations: 2190 respondents - a record for such consultations - submitted the questionnaire. All consultation documents can be accessed at http://www.rfidconsultation.eu/

Where are we today with respect to radio spectrum?

Currently the main issue is the regulations for using RFID technology in the ultra high frequency (UHF) range from 865-868 MHz. Transponders constructed for this range are less expensive and can be read much more quickly and over distances of many metres. To provide a consistent RFID environment throughout the European Union, the Commission took the initiative to ensure legal certainty regarding the spectrum range and usage conditions as formulated in the ERC (European Radio Committee) Recommendation 70-03 (http://www.ero.dk/documentation/docs/doc98/official/pdf/REC7003E.PDF#search=%22%22erc%20recommendation%2070-03%22%22).

On 4 October 2006 the Radio Spectrum Committee expressed a positive opinion on the proposed Commission Decision on harmonising Spectrum in Europe for RFIDs in the UHF band. This draft Decision is expected to be formally adopted by the end of 2006. Possible further spectrum needs beyond this frequency band can be addressed in the future, after a careful assessment of the needs actually arising from RFID applications.

Will Europe further stimulate research and innovation on RFID?

Collaborative R&D has been undertaken since 2002, with some 50 projects addressing:

§ the development of new RFID technologies (data carrier technology, systems technology, air-interface, communications and coding, etc.);

§ the development of innovative applications in certain areas and sectors (industry and services, consumer goods, the forest-wood supply chain, etc.);

§ socio-economic research;

§ and pre-normative research (i.e. developments in regulations and standards for RFID at European and international level).

Research work on RFID technologies and applications will continue to integrate RFID with other enabling technologies, such as sensors, ambient intelligence and nanotechnology. At the same time, large-scale pilots for the application of RFID will be promoted, for example in hospitals, government, logistics and production. This will be part of the Commission's new Competitiveness and Innovation framework Programme (2007-2013) (see http://ec.europa.eu/enterprise/enterprise_policy/cip/index_en.htm).

How important is the international dimension of the RFID debate?

Many of the interesting RFID application areas are not limited to the European Union. Each day large amounts of goods are shipped to (and from) the United States 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 European Commission is and intends to remain a strong partner in the international debate. Many international working groups share the commitment to anticipating, and meeting economic and social needs with compatible and interoperable solutions. In this respect, the "Initiative to Enhance Transatlantic Economic Integration and Growth" launched by the June 2005 EU-US Summit, the EU-Japan Information Society Dialogue, or the EU-China Information Society Dialogue offer good prospects for developing joint measures to accelerate the deployment of key innovative technologies such as RFID devices.

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

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 via 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 (see http://ec.europa.eu/justice_home/fsj/privacy/law/index_en.htm).
In May 2006, the Commission held 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. The Commission intends to promote further consultations and negotiations between all stakeholders on the privacy protection issue, taking into account the ongoing work carried out by the Article 29 Data Protection Working Party.

On the basis of the public consultation, the Commission Communication on RFID, planned for the end of 2006, will outline, if necessary, where further legislative intervention or clarifications of the existing legal framework could be necessary. This could lead to formal proposals in 2007.

More information on the public debate on RFID can be found at: www.rfidconsultation.eu

See also SPEECH/06/597


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