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The European Commission will make changes to the Privacy and Electronic Communications Directive to take account of the exploding market in radio frequency identification (RFID) chips, it has said.

Amendments will be proposed by the middle of this year.

The commission has published a Communication (PDF), intended as "a step towards a policy framework," for dealing with RFID chips, whose usefulness is seen by some to be at odds with privacy and data protection.

RFID is a radio technology which allows chips to be identified at short distances by chip readers. The chips themselves are so cheap - just a few pence each - they are useful in all sorts of commercial applications, from goods transit to stock management and even shop checkouts.

It is the application of the chips to people and the things people do with the chipped goods, though, that has always worried privacy activists. Information Society and Media Commissioner Viviane Reding said the advisory group she was forming to monitor RFID would work in conjunction with the Article 29 Data Protection Working Group, an existing, independent EU advisory body.

Reding announced the creation of an RFID Stakeholder Group to help the commission develop its RFID policy as part of an action plan to address the potential pitfalls and benefits of using RFID technology.

As well as the creation of the Stakeholder Group, she announced that changes to the Privacy and Electronic Communications Directive (also known as the ePrivacy Directive) would be proposed by summer to take account of RFID applications, as part of the EU Telecom Rules' review.

While the Data Protection Directive is complemented by the Privacy and Electronic Communications Directive, the latter is limited to the processing of personal data in connection with the provision of publicly available electronic communications services in public communications networks.

The commission communication notes: "Due to this limitation, many RFID applications fall only under the general Data Protection Directive and are not directly covered by the ePrivacy Directive."

Reding also promised that recommendations on how to handle data protection and privacy in relation to RFID would be published by the end of the year, and that an assessment of what other law changes would be necessary would be produced by the end of 2008.

The commission believes there can be tremendous economic and even social value in the use of RFID technology. "RFIDs are indeed seen as the gateway to a new phase of development of the information society, often referred to as the 'internet of things', in which the internet does not only link computers and communications terminals, but potentially any of our daily surrounding objects," said the commission's communication.

"RFID is of policy concern because of its potential to become a new motor of growth and jobs if the barriers to innovation can be overcome," said the commission's report. "The production price of RFID tags is now approaching a level that permits wide commercial and public sector deployment. With wider use, it becomes essential that the implementation of RFID takes place under a legal framework that affords citizens effective safeguards for fundamental values, health, data protection and privacy."

Reding said the technology could have major benefits to Europe. "From fighting counterfeits to better healthcare, smart RFID-chips offers tremendous opportunities for business and society," she said.

The commission conducted research which discovered that people in the EU were not really aware of RFID's risks or benefits. "The commission's Europe-wide public consultation in 2006 identified a strong lack of awareness and considerable concern among citizens," said Reding. "The commission's RFID strategy will therefore seek to raise awareness, stress the absolute need for citizens to decide how their personal data is used, and ensure that Europe removes existing obstacles to RFID's enormous potential."

Reding also published her views on mobile television, an emerging technology in Europe. She said interoperability was crucial to any future success of mobile television, just as the GSM standard was vital to the successful growth of mobile phone technology. "Whereas for the time being each country is developing its own Mobile TV market, the commission - which is currently preparing a communication on the subject - underlines the need for a proactive and coordinated EU-strategy," said a statement from Reding's department.

"With an estimated worldwide market of €11.4bn by 2009, mobile TV represents an opportunity for Europe to combine its strength in mobile communications with the richness and diversity of its audiovisual sector," said Reding.

"However, I am disappointed about the lack of progress made so far. Industry and Member States must work more closely together to devise a common approach, compare technologies, look at possible legal obstacles, make spectrum available throughout Europe and choose together the best way to ensure a quick and large take-up of mobile TV by Europeans, preferably based on a single standard. It is now time to draft the new model of Mobile TV that it needs to be economically successful in Europe."

Copyright © 2007, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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