The RFID policy, announced Thursday, is the latest step toward wider adoption of the controversial technology, which civil liberties groups fear could lead to unprecedented
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RFID chips, or tags, contain identification information that can be wirelessly passed on to a reader, allowing, for example, the contents of a shipping container to be identified without opening it. This promises huge improvements in supply-chain efficiency, but also raises the prospect of remote tracking of consumers via RFID chips embedded in their clothes or the cards in their wallets.
The Defense Department's policy requires that by January 2005 all suppliers embed passive RFID chips in each individual product if possible, or otherwise at the level of cases or pallets. The policy applies to everything except bulk commodities such as sand, gravel or liquids. The department said the policy would allow it to streamline its supply-chain and business processes.
In February, the department will host a summit for the industry to discuss RFID plans, and it will finalize its strategy for implementing the program by June.
Earlier this year Wal-Mart, Gillette and other companies began attaching RFID chips to merchandise sold in stores, sparking intense criticism from consumer-privacy advocates. Wal-Mart is pressing ahead with RFID plans but has said it will not embed the chips in consumer items.
One of the most outspoken critics of RFID has been privacy activist Katherine Albrecht, the head of Consumers Against Supermarket Privacy Invasion and Numbering. She called for and Gillette after each discussed plans to put RFID tags on their products. Albrecht also criticized for trying to downplay the privacy concerns over the technology after finding documents on the group's Web site that contained public relations advice on how to "neutralize opposition" to RFID systems.
Despite the controversy, major companies are moving ahead with plans to use RFID systems in stores and in warehouses. Wal-Mart, for instance, has a big RFID project underway. Marks & Spencer began this month.
Matthew Broersma of ZDNet UK reported from London.
CNET News.com's Alorie Gilbert contributed to this report.