The plan was revealed yesterday by the European Commission, which outlined its strategy for dealing with consumer concerns that compaines would use RFID to collect personal information, intruding on their right to privacy. RFID technology is helping to transform logistics by providing a means of tracking and tracing individual products throughout the supply chain. So far, the high cost of tags, error read rates and privacy concerns have held back its wider deployment. RFID could be used to track individual items, consumption patterns and consumer preferences. It could also be used to track workers among other applications. Regulations on traceability and mandates from such giant retailers as Wal-Mart and Metro are slowing forcing processors to make investments in the technology. The European Commission online survey of public attitudes toward the technology aims to analyse the economic and social effects of smart radio tags and other technologies, particularly focusing on privacy, trust and governance. The process would lead to an assessment of policy options through a consultative group who would look into the need for further legislative steps by the end of 2008, the Commission stated yesterday. Such action would be taken through amendments to the EU's e-Privacy Directive, said Viviane Reding, the bloc's information society commissioner, The consultative group would be created this year to help the Commission develop a European policy position on RFID applications. By mid 2007, the Commission plans to propose amendments to the e-Privacy Directive to take account of RFID applications, as part of an EU review of its telecom rules. The Commisson also plans to publish, by the end of 2007, a recommendation to member states on how to handle data security and the privacy of smart radio tags. The recommendation would clarify both the Data Protection Directive and the ePrivacy Directive in relation to processing personal data collected from RFID applications. The Commission also plans to "analyse the economic and social effects of smart radio tags and other technologies, particularly focusing on privacy, trust and governance, leading to an assessment of policy options and need for further legislative steps, by the end of 2008." The consultative group would be made up of representatives from industry, consumer, and data protection groups. The Commission said the proposals to address privacy concerns would boost consumer confidence and Europe's position in a market experiencing 60 per cent growth globally. The Commission's consultation found a strong lack of awareness and considerable concern among those who responded to the survey. "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," the bloc's administrative body said. The respondents cited benefits such as improved food safety though the better identification of allergens, by providing more comprehensive information on ingredients and by making it easier for companies to make product recalls. They also identified benefits in the healthcare sector and supply chain management. Privacy, health and environmental risks are among the RFID were some of the concerns cited. The consultation was held from July to September 2006. A total of 2,190 respondents answered the survey's questions, including manufacturers, system integrators, academic and scientific institutions, and regulators. "The headline issue for most is privacy," the Commission stated. "Although the vast majority of RFID applications today only identify goods or track production processes, it is widely recognised that RFID technology can also be used to process personal information collected directly or pooled from various sources." About 66 per cent of the respondents said that when RFID is used in supermarkets, they wanted a clear indication of the presence of a tag. Another 74 per cent expressed concern about the uncontrolled use by employers of RFID to track the movements of workers inside and outside of the workplance. However, respondents were more accepting of the use of RFID in applications such as the tracking and tracing of dangerous goods. Others proposed that the Commission enact specific legislation on RFID. "For example, item-level RFID tagging may be outside the scope of EU data protection and privacy legislation because there is no direct processing of personal data," the Commission noted. "Thus, consumer notice, choice and the right to object may require a mandatory feature to 'kill' the RFID tag." About 50 per cent supported specific risk assessments prior to the introduction of RFID use by a company. The Commission's proposals are being made as regulations on traceability and mandates from such giant retailers as Wal-Mart and Metro are slowing forcing processors to make investments in the technology at the pallet and case level. High prices for tags and systems has been the major barrier to item-level use. RFID uses a wireless system that helps enterprises track products, parts, expensive items and temperature-and time-sensitive goods. The technology makes it possible to have a unique identifying number for individual items. Transponders, or RFID tags, are attached to objects. The tag will identify itself when it detects a signal from a reader that emits a radio frequency transmission. Each RFID tag carries information on it such as a serial number, model number, colour, place of assembly or other types of data. When these tags pass through a field generated by a compatible reader, they transmit this information back to the reader, thereby identifying the object. According to Venture Development Corporation the worldwide market for RFID systems was $2.3bn in 2006, with hardware accounting for nearly 59 per cent of sales.