California State Senate Subcommittee on New Technologies
Hearing on RFID & Consumer Products
November 20, 2003

Statement of Jack Grasso
Director of Public Relations
Uniform Code Council

Senator Bowen, members of the Subcommittee, thank you for inviting me to participate in today’s hearing. You are addressing an important subject – the implications of radio frequency identification (RFID) for consumers around the world. We welcome the opportunity to share some thoughts on the issue.

Introduction

I am here today as director of public relations for the Uniform Code Council (UCC). As you may know, the UCC was an original sponsor of the Auto-ID Center’s research effort to develop the electronic product code (EPC). In May of this year, we entered into a joint venture agreement with EAN International to commercialize the EPC technology. That joint venture functions under the name EPCglobal. I work very closely with EPCglobal, advising them on a variety of public relations and public policy issues. Among the myriad of activities EPCglobal is involved in during this very formative period of standards development and implementation, nothing is of higher priority than issues of consumer privacy and protection.

To be clear – protecting consumer privacy and deploying the EPC in a responsible way is and always has been a very high priority for UCC and EPCglobal. In fact, through the Auto-ID Center, we began to address this issue in the very earliest stages of the research effort. And, over the past few months, have been very involved in a process to develop guidelines for the use of the EPC on consumer products. We are proud of our leadership in this area and are committed to maintaining a focus on protecting personal privacy as the commercialization process moves forward.

Before I get into the substance of my remarks today, allow me to share a bit of background about the UCC for those present who may not be familiar with us. . The UCC is a not-for-profit organization dedicated to the development and implementation of standards-based, global supply chain solutions. UCC-based solutions, including business processes, and the bar code identification standards of the EANUCC System are currently used by more than one million member companies worldwide.

In a nutshell, we touch the lives of millions of consumers every day and, through our standardized automatic identification technologies, enable improved supply chain management around the world. Meeting consumers’ needs and driving customer satisfaction is a large part of our mandate as an organization. So, you can see why we take very seriously the consumer-related implications of the EPC technology.

Guidelines for Consumer Products - Overview

To get to the subject of today’s hearing, RFID and consumer products, let me start by sharing some background about the EPC technology. Electronic Product Code (EPC) is an emerging system that uses Radio Frequency Identification (RFID) for the automatic identification of consumer products. RFID is now being used in everything from automobiles to security pass cards, and it serves a variety of purposes. One of its widespread uses is in devices such as EZ Pass in the US and Liber-T in France that speed the passage of autos through highway tollbooths.

EPC has the potential to be used on many everyday consumer products as they move through the supply chain – from factories through distribution centers and into retail stores. As EPC evolves, it promises to offer significant benefits to consumers and companies. The improved information in the supply chain will help speed products to the shelf and insure they are available when consumers want and in the quantities they need. Removal of expired products will be easier, and prompt removal of any recalled product will be facilitated. In addition, checkout times for customers could be significantly shortened.

To allow EPC to realize its potential for consumers, retailers and suppliers, it is important to address privacy concerns prompted by the current state of the technology while establishing principles for dealing with its evolution and implementation.

Accordingly, at the final Auto-ID Center Board of Overseers meeting on October 28, 2003, the sponsors of EPC adopted guidelines for use by all companies engaged in the large-scale deployment of EPC. These guidelines are intended to complement the substantive and comprehensive body of national and international legislation and regulation that deals with consumer protection, consumer privacy and related issues.

As new developments in EPC and its deployment occur, these guidelines will evolve while continuing to represent the fundamental commitments of industry to consumers. It is hoped that further developments, including advances in technology, new applications and enhanced post-purchase benefits, will provide even more choices to both consumers and companies on the use of EPC tags

These guidelines will be administered by EPCglobal, a joint venture between EAN International and the Uniform Code Council. The EAN.UCC also sets and maintains standards for the product code now used on consumer products. EPCglobal also will be responsible for updating these Guidelines. For EPC to gain broad acceptance, consumers must have confidence in its value and benefits and the integrity of its use. EPC participants are committed to gaining and retaining this public confidence. EPCglobal will monitor the proper use of these guidelines and be responsible for updating them.

Because EPC is an emerging technology in an early development stage, usage guidelines supplementing or modifying those adopted by the sponsors will evolve as applications are developed and implemented. Given the current state of the technology and the relatively early stage of its deployment at the consumer unit level and to allow participants appropriate time to implement the guidelines, EPCglobal has established January 1, 2005 as the expected date by which companies will follow the adopted guidelines.

Guidelines for Consumer Products – Detail

I have provided to the subcommittee a complete version of the Guidelines for Consumer Products for your review. Additional information may be found on the EPCglobal website. In general, the elements of the guidelines include:

• Consumer Notice: Consumers will be given clear notice of the presence of EPC on products or their packaging. This notice will be given through the use of an EPC logo or identifier on the products or packaging.
   
• Consumer Choice: Consumers will be informed of the choices they have to discard, disable or remove EPC tags from the products they acquire. It is anticipated that for most products, the EPC tags would be part of disposable packaging or would be otherwise discardable. EPCglobal, among other supporters of this technology, is committed to finding additional cost effective and reliable alternatives to further enable consumer choice.
   
• Consumer Education: Consumers will have the opportunity easily to obtain accurate information about EPC and its applications, as well as information about advances in the technology. Companies using EPC tags at the consumer level will cooperate in appropriate ways to familiarize consumers with the EPC logo and to help consumers understand the technology and its benefits. EPCglobal would also act as a forum for both companies and consumers to learn of and address any uses of EPC technology in a manner inconsistent with these Guidelines.
   
• Record Use, Retention and Security: As with conventional bar code technology, companies will use, maintain and protect records generated through EPC in compliance with all applicable laws. Companies will publish, on their Websites or otherwise, information on their policies regarding the retention, use and protection of any consumer specific data generated through their operations, either generally or specifically with respect to EPC use.

Conclusion

These guidelines demonstrate that EPC participants are committed to addressing the issue of consumer privacy and engaging in a constructive and on-going dialogue with interested parties. The overriding goal of the guidelines is to provide a responsible basis for the use of EPC tags on consumer items. Under the auspices of EPCglobal, these guidelines will continue to evolve as advances in EPC and its applications are made and consumer research is conducted.

Again, we are proud of our work in the area of RFID and consumer protection. I thank you again for the opportunity to be here today.

Thank you.