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All Eyes On You

How Spy Chips Are Quietly Reshaping Privacy

By Martin H. Bosworth
ConsumerAffairs.com

December 15, 2005

• RFID Eyed as Anti-Shoplifting Tool • Internet Providers Admit to Monitoring Customers' Web Surfing • Big Brother Hitching A Ride in California? • GAO: Government Can Do More to Protect Personal Data • US Search Agrees to Stop Selling Private Credit Data • TSA Site Left Passenger Data Exposed To ID Theft • Connecticut Governor Wants 'Opt Out' For Online Directories • Verizon Gave Customer Data To Government Without Court Orders • House Democrats Probe Warrantless Surveillance --- • More Privacy News ...

You may not realize it, but that pack of disposable razors you just bought can enable you to be tracked wherever you go. Same with that discount card you used to buy the razors in the first place.

Somewhere, a computer is collating and tabulating all of your information from the moment you step into the store, and using it to generate a "profile" of you for unknown purposes.

Not only that, but one day in the near future, you could have a little microchip implanted in your body. Like something out of "Blade Runner" or "The Matrix," you could be electronically "tagged" and identified in order to build a record of your medical information, accessible anywhere in the world -- and for other purposes you may not know about.

Sound like cyberpunk at its most cliché? Far from it. Radio frequency identifiers (RFID) -- more commonly known as "spy chips" -- are a reality in everything from retail business to medical records.

And that's just the beginning. In the words of Alex Eckelberry, president of Florida-based Sunbelt Software, "The problem with RFID…[is that] we are headed toward a state where privacy will be a thing of the past."

Brave New World

RFID works on a deceptively simple principle. An object is implanted or "tagged" with a small computer chip. The chip is monitored wirelessly by a "reader" that identifies its unique signature, and whatever information is on the chip is automatically stored in a linked database.

What makes this different from classic "bar codes" is that the data storage capacity for RFID enables each and every tagged item to have its own unique identifier, whereas the bar code system has one code for an entire class of item.

Business was quick to jump on the concept of millions of products that could be individually identified and tracked. Wal-Mart has led the way in using RFID tagging, investing $250 million in RFID technology and requiring their distributors to mark high-end items such as consumer electronics with RFID tags.

Walgreens recently partnered with marketer Goliath Solutions to track promotional displays in its 5,000 stores nationwide using RFID tags. The tags will be used to track how long displays are made available in stores, group displays by regional interest, and so on.

"With the GOLIATH system, we'll have unprecedented insight into marketing data collected daily from every store," said Robert Kral, Walgreens vice president of purchasing in a press statement.

RFID tags are used in the EZ Pass toll-charge system popular throughout the Northeast. EZ Pass users prepay a certain amount and install a transponder in their car.

When passing through tolls that use the EZ Pass system, a reader in the toll booth identifies the transponder and automatically deducts the amount of the toll from the driver's account.

The government is also getting in on the RFID action. The Department of Homeland Security (DHS) is testing the use of RFID-tagged cards for visitors to and from the United States. Border guards would "read" the cards each time a visitor to the U.S. crossed the divide.

The Defense Department has issued several big-ticket contracts to RFID suppliers in order to tag their shipments of food, clothes, and weapons around the world.

Investment in RFID is booming. A study by the Gartner research group found that worldwide spending on the technology was $504 million in 2005, with total spending expected to increase to $3 billion by 2010.

"Businesses are beginning to discover business value in places where they cannot use bar coding, which will be the force that moves RFID forward," Gartner's vice-president of research, Jeff Woods, said.

The Body Electric

The most controversial aspect of RFID technology usage is the concept of installing RFID tags in living beings, humans and animals alike. A rabies scare in the Bordeaux region of France in September 2004 motivated the Digital Angel Corporation to distribute 50,000 of its RFID tags to implant in pets in the region.

A year later, Digital Angel supplied 2,000 chips and 28 readers to identify pets displaced by Hurricane Katrina, both to read chips that had already been implanted in pets, and to create a database of information about the animals in order to identify them.

Digital Angel is a subsidiary of Applied Digital, Inc., a company that specializes in "information and security solutions." Another Applied Digital subsidiary, VeriChip, has championed the usage of implanting RFID tags in humans for medical database tracking.

VeriChip's "VeriMed" tracking solution would enable doctors to identify medical patients who may be unable to provide proof of who they are or who can't communicate effectively. The patient would have an RFID chip implanted on their body, which the physician could then track with a handheld reader.

The patient's medical information would be stored, according to VeriChip, "[in] a designated secure healthcare information database, allowing [the physician] to immediately take the safest course of action."

VeriChip has currently deployed the VeriMed system in 68 medical facilities, including 65 hospitals.

Applied Digital is taking advantage of recent publicity about RFID to file an initial public offering for VeriChip, scheduled to close in late 2006.

According to the press release announcing the IPO, "Offering proceeds will also be used for enhancing the growing sales of the infant protection systems, wander prevention systems and asset tracking systems both in the United States and internationally."

VeriChip got a huge publicity boost from the support of former Department of Health and Human Services (HHS) chairman Tommy Thompson. Thompson serves on the board of directors of VeriChip, and publicly exhorted the virtues of using RFID for medical information tracking.

In an interview with CBS MarketWatch, Thompson compared the technology's growing usage to that of the iPod.

"Today everybody knows what an iPod is," said Thompson, "and the same thing as with a chip in your arm that is placed there instantaneously, and is going to be able to help you secure your medical records which will be able to allow you to…be able to get immediate care."

Thompson also said that he himself would be willing to get "chipped" in order to demonstrate how quick and easy the procedure is. However, when asked about it on December 5th, VeriChip spokesman John Procter said that Thompson had yet to undergo the procedure.

According to Procter, The procedure is "very quick and painless," but Thompson has to fit it into his schedule. In an interview with ConsumerAffairs.com, Procter said that "it will be handled in an appropriate fashion."

Procter emphasized that all uses of the chip are "completely voluntary." "We will not have [the chip] imposed on people who don't want it." The best uses for the chip would be for patients who may be mentally ill or have prior conditions that require constant care, he said.

Legal guardians of patients who may be unable to communicate their desires may have the authority to "chip" someone without their permission. The data would be stored in a "secured, password-protected, firewalled database" maintained by Applied Digital, except in cases where hospitals maintained their own databases.

Although Procter stressed that the database would meet conditions required by the Privacy Act and the Health Insurance Portability and Accountability Act (HIPAA), which governs the collection and protection of medical records, he could not verify if the administrators would themselves be HIPAA-certified.

"Total Surveillance"

No one has done more to bring the issues surrounding RFID technology to the public than Katherine Albrecht.

Albrecht is the founder of Consumers Against Supermarket Privacy Invasion and Numbering (CASPIAN), which regularly reports on the potential abuses of loyalty cards and discount card memberships in retail stores, and has become a tireless foe of spy chips.

Albrecht and her chief partner, Liz McIntyre, have repeatedly exposed the surreptitious usage of RFID in everyday life.

Albrecht recently told Mother Jones magazine, "The problem with RFID has to do with the fact that the RFID tags can be so easily hidden into products -- things people buy and carry -- and the reader devices can be so easily hidden into aspects of the environment. This makes it extremely easy for someone who wants to observe and watch people in these surreptitious ways to do so."

CASPIAN's efforts have led to such findings as the insertion of tiny RFID tags into Gillette razorblade packages and the usage of spy chips in discount cards for the METRO "future store" in Rhineberg, Germany.

Albrecht and McIntyre recently published "Spy Chips: How Major Corporations and Governments Plan to Track Your Every Move with RFID," which details their investigations of RFID usage and its implications.

In an interview with ConsumerAffairs.com, McIntyre was skeptical that the total amount of spending on RFID was $504 million. "That's pretty low," based on their findings, she said.

McIntyre said that Walgreens and Goliath could use their new RFID system "not just to track displays, but customers as well." She noted that Goliath has emphasized the ability to hide the RFID readers in light fixtures and other unobtrusive areas, "so customers couldn't see them."

McIntyre obtained patent and trademark information filed by Goliath regarding the usage of their RFID tracking information.

According to the patent filing, tracking store displays with RFID tags would "monitor and report exposure of particular shoppers to marketing materials that are being monitored by the system. The system will therefore allow companies to monitor and remedy compliance problems during an advertising program, which will improve overall compliance and increase the effectiveness of the advertising program. It will also allow fee-based marketing programs that are conditional upon certain retail conditions being present at a particular time to be executed with more precision, reliability, and verifiability.

"Furthermore," says the filing, "it will allow the flow of specific shopper traffic within a store to be monitored and analyzed. In addition, the system will allow subsequent marketing programs, such as coupons or direct mail, to be tailored to or made conditional on shopper interests, shopping patterns, or prior exposure to marketing materials."

Who Watches The Watchmen?

A concern expressed by opponents of RFID chips is that identity thieves and criminals may be able to use their own readers to "tag" the data in a chip. McIntyre believes that while that is a concern, the major issue should be with businesses and government agencies who have the capability to collect this information and who are already doing so without the public's consent.

"The Pentagon has been in talks with VeriChip" over using these technologies, said McIntyre. "We're looking at…a government-held database of medical information records on every American."

Alex Eckelberry thinks that the usage of RFID for surveillance presages an erosion of individual privacy, and individual liberty with it.

"One of the founding tenants of our society is the belief that freedoms and privacy are interconnected. We have fundamental freedoms that are vital for our nation to continue to succeed, and we have seen a slow whittling down of these freedoms that pose a real danger to our future. Freedom and privacy are critical to a healthy society."

In the landmark Harvard Law Review article, "The Right to Privacy," Supreme Court Justice Louis Brandeis laid out the case for privacy being an essential right.

"Recent inventions and business methods call attention to the next step which must be taken for the protection of the person, and for securing to the individual what Judge Cooley calls the right 'to be let alone,'" Brandeis wrote.

Though he was speaking of "instantaneous newspaper photographs" and an increasingly invasive press, he could just as easily have been speaking of spy chips when he said, "The intensity and complexity of life, attendant upon advancing civilization, have rendered necessary some retreat from the world, and man, under the refining influence of culture, has become more sensitive to publicity, so that solitude and privacy have become more essential to the individual; but modern enterprise and invention have, through invasions upon his privacy, subjected him to mental pain and distress, far greater than could be inflicted by mere bodily injury."

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