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RFID tags are small and relatively low-cost circuits capable of communicating with a fixed or portable device, the reader. Such tags can be attached to consumer goods, packaging and other items to optimise inventory and retrieval activities. They are present in smart cards and chips for payments and identification (see EurActiv Links Dossier on RFID).

They are increasingly used in products destined for final users, often without their awareness, raising fears over the possible misuse of any personal information collected. For this reason, in March 2007 the European Commission adopted a communication announcing further measures to address privacy-related concerns arising from the development of RFID.

In February 2008, Information Society Commissioner Viviane Reding issued a draft recommendation defining the guidelines to be followed to avoid abuse or misuse of private information collected via RFID devices.

Fifteen months after putting out for consultation a draft recommendation on RFID, the Commission is finally due to adopt the document, leaving its original proposal largely unchanged (EurActiv 26/02/08).

Although not binding, the text is meant to increase legal certainty on how to deploy RFID, which many companies are already extensively using as a complement or alternative to the more-widely known but less effective bar codes.

According to Commission figures, in 2008 almost 2.2 billion RFID tags were sold in the world, roughly a third of which were in Europe: significant growth compared to 2007. The global market for RFID in 2008 was worth €4 billion and is foreseen to increase in the coming years, up to €20 billion by 2018. "The European share of the global smart tags market will reach 35% in the next eight years," says an internal EU document obtained by EurActiv.

In line with what the Commission proposed in February 2008, the recommendation will require retailers which use RFID tags to store and track products to deactivate them at the point of sale. This will avoid potential privacy and security-related problems to consumers. 

Buyers will also be offered an opt-in, meaning that they could agree to keep the tags active if they wish, to have a product identified and retrieved if proven to be dangerous, for example. This would help consumers and industry alike, as companies will not be forced to take off the market entire stocks in cases of proven but limited danger, such as the recent case involving contaminated Chinese milk powder. If consumers fail to voluntarilyy opt-in, tags will instead be deactivated. 

Privacy protection groups pushed for the opt-in/out principle to be adopted to prevent personal data - such as name, surname and credit card number - from being stolen and the information accessed via RFID readers.

However, the Commission underlines that the approach adopted so far is aimed at preventing such theft, which at the moment is unlikely due to the relatively low diffusion of RFID readers and their low technological development. 

BEUC, the European consumers' organisation, hailed the "long-awaited" recommendation as "an important first step towards finally addressing some of the core consumer concerns linked to RFID".

The Commission also gave European standardisation bodies the mandate to define a standard sign to identify RFID, to be be displayed wherever tags or readers are located in order to make consumers aware of their presence.