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rfid – dealing
with the data
Ian Sampson, partner in the technology and outsourcing team at Addleshaw
Goddard, warns of potential legal risks in retail RFID implementation

T         he use of RFID in the retail sector
          is truly diverse: tracking products
          to improve supply chain efficiency
and increase visibility of inventory are just two
benefits. The potential exists for enhanced and
                                                     concerns were raised. When information security
                                                     is thrown into the bargain, it’s clear that there are
                                                     copious legal hurdles to be considered.
                                                         Responding to these concerns, the
                                                     Information Commissioners’ office issued a
                                                                                                             Addressing Privacy
                                                                                                             Challenges and Gaining
                                                                                                             Commercial Advantage
                                                                                                             RFID technology offers enormous data
                                                                                                             possibilities for retailers. However, adopters of
accurate information flow — refreshed faster         statement that confirmed that “where the use            RFID must communicate openly and comply
than ever was achievable before. Large retailers     of such tags involves the collection, generation        with the guidance issued to date if they are to
(reportedly Wal-Mart and the UK’s Marks &            or disclosure of personal information, then             avoid or at least reduce the risk of consumer
Spencer) are using RFID with substantial returns     the Data Protection Act 1988 will apply. This           and regulatory backlash. Retailers would be
at many levels.                                      means that individuals must be aware when               wise to consider the following:
   Back office software and processing               information is being collected about them                  The requirement of ‘fair and lawful
capabilities allow the handling of increasingly      and what for.” However, the Information                 processing’ is broad and means that
large banks of data obtained from RFID.              Commissioner goes on to say: “Even where                deployers of RFID tags may need to label
As such, companies are continuing to build           personal information is involved, it is perfectly       those products containing tags, provide
comprehensive profiles of consumer behaviour,        possible to comply with the act.” To do this,           information on how to disable or remove tags
spending habits, preferences, and the                                                                        and inform consumers when RFID readers
movement of goods — and using these for
a range of intelligent data activities including
                                                     with some                                               are within range.
                                                                                                                Retailers must also ensure that the
highly targeted marketing and dynamic pricing.
However, retailers must take care to manage
                                                     consideration                                           personal data collected is secure and
                                                                                                             is not kept any longer than necessary
the legal risks of RFID implementation including
• RFID Technology Contracts
                                                     and hard work,                                          by incorporating RFID into existing data
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