Computer chips that identify themselves over the airwaves must only be kept live in consumer products if the shopper specifically asks for them not to be deactivated, the European Commission has said.
The Commission said that consumer privacy was in danger if radio frequency identification (RFID) chips were not properly handled. It has just published a formal Recommendation on how the chips should be managed.
RFID chips are increasingly used in consumer products in shops to help inventory and supply management and other retail logistics. But the Commission has warned that they must be turned off as a matter of course when consumers take goods out of shops.
"Consumers should be in control whether products they buy in shops use smart chips or not," said a Commission statement. "When consumers buy products with smart chips, these should be deactivated automatically, immediately and free-of-charge at the point of sale, unless the consumer explicitly opts-in by asking to keep the chip operational."
The Recommendation also covers the way companies use chips to manage, for example, building access or provision of services.
"Companies or public authorities using smart chips should give consumers clear and simple information so that they understand if their personal data will be used, the type of collected data (such as name, address or date of birth) and for what purpose," said the Commission. "They should also provide clear labelling to identify the devices that 'read' the information stored in smart chips, and provide a contact point for citizens to obtain more information."
RFID chips have become increasingly popular as their price has fallen in recent years. The Commission said that 2.2 billion RFID tags were sold last year, a third of them in Europe.
The Commission conducted a public consultation on the chips in 2006. Member states must now inform the Commission how they will ensure that the just-published Recommendation will be met in their country.
Another point in the Recommendation is that any product containing an RFID chip is badged with a common, EU-wide sign alerting consumers to that fact.
The Commission also said that any organisation using RFID chips must conduct a privacy and data protection assessment on its impact on privacy, and that these studies must be reviewed by their country's data protection authorities.
"A promising technology for the future, smart chips can make life simpler in all sorts of ways," said the Commissioner for the Information Society, Viviane Reding. "There is clear economic potential in using small, smart chips to allow communication between objects."
"But Europeans must never be taken unawares by the new technology. This is why the Commission issued strong recommendations to the industry today. European consumers must be confident that if and when their personal data is involved, their privacy will be impregnable also in a changing technological environment," she said.