EU "smart chip" guidelines aim to protect privacy

BRUSSELS (Reuters) - "Smart" chips embedded in items ranging from pets to retail products will have to be deactivated at the point of sale to protect purchasers' privacy under draft guidelines proposed on Thursday by the European Commission.

A public consultation is being launched into the "soft law" guidelines that EU Information Society and Media Commissioner Viviane Reding hopes will be adopted by the European Union executive to be applied in all the bloc's 27 member states.

The guidelines seek to strike a balance between protecting privacy and allowing new technologies to flourish, a Commission spokesman said.

"The recommendation is tentatively scheduled to be adopted before the summer of 2008," the Commission said in a statement.

Radio Frequency Identification (RFID) devices are small tags that can be attached to products in stores, for example as anti-theft devices. They can also be implanted in pets or vehicles so that owners can locate them easily.

The growing use of RFID among retailers has raised fears about the sensitive data they could be used to gather -- for example, a tag embedded in clothing might be used as a surveillance tool.

Reding's draft set of guidelines encourage the creation of a common symbol denoting that a product contains an RFID chip so they cannot be used covertly.

The tag should also be deactivated at the point of sale unless the consumer asks otherwise.

Trade associations that represent manufacturers should draw up codes of conduct on RFID use, the draft recommendation said.

(Reporting by Huw Jones; Editing by Catherine Evans)