www.ipc.on.ca how privacy could affect the future roll-out of rfids: take note ann cavoukian, ph.d....

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How Privacy Could Affect the How Privacy Could Affect the Future Roll-Out of RFIDs: Future Roll-Out of RFIDs:

Take NoteTake Note

Ann Cavoukian, Ph.D.Ann Cavoukian, Ph.D.Information & Privacy Commissioner/Ontario

Symposium on Supply Chain Management

September 30, 2004

www.ipc.on.cawww.ipc.on.ca Slide 2

Just What is an RFID?

Radio Frequency Identification (RFID)

Generic term for technologies that use radio waves to automatically identify individual items


RFIDs and Supply Chain Management

Products are embedded with an RFID tag, which includes a microchip and tiny radio antenna

The microchip may contain data about the product, including a unique identifier called an Electronic Product Code (EPC)

Cases and pallets of products may also include their own RFID tags


RFID Readers

RFID readers at various points in the supply chain (e.g., factory loading docks) “wake up” the tags, which transmit the EPC and other data to the readers at a short distance (passive RFIDs)


Benefits of RFIDs

RFID technology offers benefits for supply chain management:

• More efficient management and tracking of goods and inventory

• Reduced labour costs (e.g., no manual scanning of individual items is required)


EPCglobal

Non-profit organization that is leading the development of industry standards for the Electronic Product Code (EPC), including the use of RFID technology

Public Policy Steering Committee is responsible for setting privacy standards


Privacy and RFIDs

RFID tags contain information about a product, not an individual (e.g., EPC, price, size, colour, manufacture date, etc.)

But many consumers perceive a threat to privacy


Consumer Perceptions

Consumers perceive that RFIDs may facilitate:• The merger and linking of product information

and personal information without consent• The ability to track consumers who have

purchased a product• The establishment of a widespread surveillance

infrastructure


Implementing RFIDs

A failure to build privacy into the design and implementation of RFIDs can produce a consumer backlash

This can have an adverse impact on a company’s reputation and affect the bottom line


Consumer Backlash

How real is this?

Could privacy truly affect the roll-out of RFIDs?


Benetton

Italian clothier Benetton sparked a furor after it announced plans to implant RFID tags in its apparel (April 2003)

Public opposition forced the company to cancel its plans


Gillette: Keeping “Tags” on Customers

Privacy groups threatened a consumer boycott after the media reported that Gillette was testing a “smart shelf” at a Tesco store in the U.K., possibly for theft detection purposes (July 2003)

RFID tags embedded in Gillette razor packages triggered CCTV cameras that took a picture of a customer both when he or she removed a package from the shelf and at the check-out


Metro AG

Metro AG, a German company, announced plans to start using RFID chips in supermarket loyalty cards in one store

The purpose of this initiative was supposedly to allow the store to verify the age of shoppers wanting to view DVD movie trailers

Metro AG abandoned its plans after protests from privacy groups (March 2004)


Checkpoint: Tracking Individual Items

Checkpoint Systems Inc. announced earlier this month that it has developed new RFID solutions for tracking individual consumer items

CASPIAN, a U.S.-based consumer rights group, claimed that: • Checkpoint was developing RFID “spychips” for three

well-known clothing labels• Consumers wearing the tagged clothing could potentially

be identified and tracked by readers


Get Ready for a Good Fight

Checkpoint senior executive: “These RFID applications are prototype designs to demonstrate how the technology will fulfill a customer’s need for greater information and stock availability …”

CASPIAN: “[We] will be working with consumers on an aggressive response to this privacy threat. Roll up your sleeves and get ready for a good fight.”


Information Privacy Defined

Information Privacy/Data Protection

• Freedom of choice; control; informational self-determination

• Personal control over the collection, use and disclosure of any recorded information about an identifiable individual


Fair Information Practices:A Brief History

OECD Guidelines on the Protection of Privacy and Transborder Flows of Personal Data

EU Directive on Data Protection

CSA Model Code for the Protection of Personal Information

Personal Information Protection and Electronic Documents Act (Canada)


Summary of Fair Information Practices

AccountabilityIdentifying PurposesConsentLimiting CollectionLimiting Use,

Disclosure, RetentionAccuracy

SafeguardsOpennessIndividual AccessChallenging

Compliance


Federal Private-Sector Privacy Legislation

Personal Information Protection and Electronic Documents Act (PIPEDA)

Applies to personal information collected, used or disclosed in the course of commercial activities by all:

• federally regulated organizations and • provincially regulated organizations, unless a

substantially similar provincial privacy law is in force


Provincial Private-Sector Privacy Laws

Québec: Act respecting the protection of personal information in the private sector

B.C.: Personal Information Protection Act

Alberta: Personal Information Protection Act

Ontario: draft Privacy of Personal Information Act, 2002 – not introduced…so PIPEDA applies


How The Public Divides on Privacy

26

64

10

0 20 40 60 80

Feb 2003(%)

PrivacyUnconcerned

PrivacyPragmatists

PrivacyFundamentalists

The “Privacy Dynamic” - Battle Dr. Alan Westinfor the minds of the pragmatists


Importance of Consumer Trust

In the post-9/11 world:• Consumers either as concerned or more concerned about online

privacy• Concerns focused on the business use of personal information,

not new government surveillance powers

If consumers have confidence in a company’s privacy practices, they are more likely to:• Increase volume of business with company…….... 91%• Increase frequency of business……………….…... 90%• Stop doing business with company if PI misused…83%

Harris/Westin Poll, Nov. 2001 & Feb. 2002


Damage Caused by Privacy Breaches

The Information Security Forum reported that a company’s privacy breaches can cause major damage to brand and reputation:• 25% of companies surveyed experienced some

adverse publicity due to privacy• 1 in 10 had experienced civil litigation, lost

business or broken contracts• Robust privacy policies and staff training were

viewed as keys to avoiding privacy problems

The Information Security Forum, July 7, 2004


Building Privacy Safeguards into RFIDs

RFIDs will continue to produce a consumer backlash unless both RFID manufacturers and business users adopt privacy safeguards

Privacy is not a concern at most stages of the supply chain (e.g., tracking items in a warehouse)

However, privacy concerns are triggered at the point when a consumer comes into contact with a product with an RFID tag


The Privacy Solution

RFID tags should be de-activated at the point of sale

De-activation should be the default

Customers should be able to choose to have an RFID tag re-activated


Openness and Transparency

Businesses should be open and transparent with consumers about the use of RFID tags and readers

If RFIDs are embedded in a product that makes its way to the retail shelf, proper notice should be provided to consumers


Notice

Notice must be conspicuous to the consumer and explain what an RFID is in plain language (not technical language)

It must explain where RFIDs are being used and for what purposes

Proper notice could be in the form of signs, labels, brochures, etc.


Choice

Potential reasons for RFID tag re-activation:• Facilitating product returns and warranty

servicing• Facilitating recovery of lost or stolen products

to consumer• Enabling interaction with “smart” appliances

Consumers should have the choice to have an RFID tag re-activated without cost


Use Limitation

Personal information must not be used for purposes other than those for which it was collected, except with the consent of the individual or as required by law


Consent

A business must not merge or link a consumer’s personal information with RFID information about a specific purchased product, without that individual’s knowledge and consent

Consent must be voluntary and informed, which means that the individual understands the nature and consequences of providing or withholding consent


Challenging Compliance

A business should have a clear process in place for resolving privacy complaints from its customers about RFIDs

A business’s chief privacy officer (CPO) and other privacy compliance staff must be key players in the design and launch of any RFID initiative


Staff Education and Training

Both managers and frontline employees must be provided with privacy training that includes information about RFIDs

They must be trained to provide clear, honest and informed answers to customers who have privacy concerns about the tracking potential of RFID tags


To Find out More …

The Information and Privacy Commissioner of Ontario has published two RFID papers:

• Tag, You’re It: Privacy Implications of Radio Frequency Identification (RFID) Technology (February 2004)www.ipc.on.ca/docs/rfid.pdf

• Guidelines for Using RFID Tags in Ontario Public Libraries (June 2004)www.ipc.on.ca/docs/rfid-lib.pdf


Final Thought

“Anyone today who thinks the privacy issue has peaked is greatly mistaken…we are in the early stages of a sweeping change in attitudes that will fuel political battles and put once-routine business practices under the microscope.”

Forrester Research, March 5, 2001

www.ipc.on.ca

How to Contact UsHow to Contact Us

Commissioner Ann CavoukianCommissioner Ann CavoukianInformation & Privacy Commissioner/Ontario

2 Bloor Street East, Suite 1400

Toronto, Ontario M4W 1A8

Phone: (416) 326-3333

Web: www.ipc.on.ca

E-mail: [email protected]