RFID centre to open in Scotland next year

Sun is set to turn up the heat in the controversial RFID tracking tag debate by opening a centre in Scotland for European companies to test their radio tag ID systems and make sure they comply with regulatory and privacy laws.

The announcement was made at Sun's first European user conference in Berlin today and signals its intention to stake a claim in what is likely to be a lucrative market. An RFID tagged basket of goods was demonstrated at a check out by Sun's chairman, president and CEO Scott McNealy.

The centre is due to open in February next year and is an addition to its US facility. Sun maintains that RFID tags have the potential to cut huge costs from the supply chain of retailers and manufacturers and said the European centre will help firms with the tagging of products, integrating the information into back-end systems and sharing it with their supply chain partners.

Sun claims the large, and often undisclosed, losses suffered by manufacturers from theft will be an unstoppable driver for firms to adopt RFID tags as a replacement for the barcode. Gillette, which trialled the tracking tags in its razor blades earlier this year, admits to losing around $30m a year this way. In the UK Marks & Spencer and Tesco have both embarked on pilots using RFID tags in clothes, CDs and DVDs.

In the US Wal-Mart is to spend $3bn on RFID technology and has drawn up specifications that its top 100 merchandise suppliers should adhere to by 1 January 2005. The new European testing centre will allow firms to comply with the Wal-Mart mandate.

Sun's move is unlikely to be popular with privacy groups who, earlier this month, called for the suspension of RFID deployments amid fears that the tags will be used for more nefarious people-tracking purposes once they have left stores with tagged goods.

Sun's chief researcher and technology visionary John Gage told silicon.com that the centre will work to make sure deployments comply with privacy laws but admitted that more work needs to be done to reassure consumers that the data will not be later used for other purposes.

"People start with one set of motives – like retailers cutting down on pilfering - and then the privacy issues are suddenly seized upon. But there are no decent policy guidelines," he said.

The privacy issue will become much greater with the "inevitable" introduction in the future of DNA-based electronic ID, according to Gage.

"Everything is becoming uniquely identifiable and traceable," he said. "And wait until you get DNA chips, which will happen as the cost plummets."