RFID (Radio Frequency Identification) chips have already been deployed at higher rates than in Europe, in the United States, Japan, China and South Korea. They are applied in several different sectors, ranging from transport (luggage retrieval) to healthcare (for safer blood transfusion) and from pharmaceuticals (against counterfeiting) to retailing (replacing bar codes).
By allowing objects to exchange information among themselves, RFID chips have the potential to create an "Internet of things" – for example, a fridge could automatically communicate with a shop to order eggs once they are finished. The world market for these devices in 2007 has been estimated at 4.2 billion euros, with the Commission predicting it could grow five-fold within ten years.
Private concerns dominate
European deployment of this revolutionary technology is still lagging behind the other main global actors. "We are seeing things being shaped, but they are shaped outside Europe," warned Gerald Santucci, a Commission official in charge of RFID.
One reason for the low penetration of RFID in Europe is the diffident approach towards this new technology, generally first considered in terms of its legal and privacy-related risks, and only afterwards for its wide-ranging economic and social benefits. As a result, instead of exploring ways to deploy the devices, the debate on RFID in the EU mainly focuses on data protection (see EurActiv 26/02/08).
"We are privileged because Europe is where this issue is felt more strongly," underlined Santucci. Paradoxically, "Europe has the best legal framework to tackle privacy-related concerns," he explained, mentioning the existing Data Protection Directive and E-Privacy Directive. Nevertheless, new legislative action in the field is expected "by the end of the year," he said during a conference in Brussels on 12 March. The E-Privacy Directive itself is under review to take into consideration new concerns which have emerged with the latest technologies.
Lack of awareness and a fragmented market
Another European shortfall in the uptake of RFID is low awareness of their benefits and even their very existence by the majority of citizens and SMEs. The Commission is about to launch an Information Day on RFID, likely to be held on 23 April.
Moreover, the European market remains fragmented, with different approaches developed at national level and wide intra-EU differences regarding overall knowledge and development of the new technology.
To tackle this structural deficit, Brussels will launch a "thematic network" this year aimed at making stakeholders discuss common approaches, including EU standards to develop the new technology more quickly and more safely. 800,000 euro from the EU budget have been made available for this purpose.
The successful establishment of GSM standards for mobile telephony has shown that "Europe can and should be able to affirm its identity on standards," added Santucci.