New York Times

New York Timesfree registration required A Radio Chip in Every Consumer Product.

And, yes, Procter & Gamble will notice if a case of Pantene shampoo does not make it to the Wal-mart Supercenter in Broken Arrow, Okla. Its truck is equipped to monitor signals continuously from chips hidden in each case. If any case stops sending its “Hi, I'm still here” signal, a monitor in the “smart truck” will record exactly when and where.

Such technology, known as radio-frequency identification — the same techniques that enable an electronic sensor to record data from an E-ZPass tag or an office door to open for people with chip-equipped cards in their pockets — could one day stymie pilferers. But it is also capable of doing much more for commerce. Beyond Gillette and Procter & Gamble, companies as diverse as International Paper and Canon USA are teaming up with retailers and customers to apply R.F.I.D., as it is known, to tracking products from the time they leave an assembly line to the time they leave the store.

The companies are tagging clothes, drugs, auto parts, copy machines and even mail with chips laden with information about content, origin and destination. They are also equipping shelves, doors and walls with sensors that can record that data when the products are near. “We want to track all of our merchandise, and that includes items that people are unlikely to steal,” William C. Wertz, a spokesman for Wal-Mart Stores, said.

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Consumer privacy is also an issue. It would be easy to combine credit card data with information from the retail chips to know who bought what, and when — and, conceivably, track the product even after it left the store.

“I don't think the average consumer understands the threat to personal privacy that these kinds of technologies can present,” said Alan N. Sutin, a partner specializing in information technology at the law firm of Greenberg Traurig.

William H. Steele, a consumer products analyst with Bank of America, doubts companies will “succumb to the temptation to keep tracking products in the consumers' hands,” but he, too, stops short of calling the issue specious. “There should be a certain level of skepticism on the part of the U.S. consumer,” he said.  [Privacy Digest]

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