EU Information Society and Media Commissioner Viviane Reding has voiced concerns about the use of RFID chips for several years.

Up until now, this has merely led to a lot of talk and a few recommendations, but every statement various EU bodies makes on the subject suggests it is nudging closer to formal legislation.

In March 2007, the European Commission issued a communication on the use of RFID that suggested the industry could regulate itself. In December last year, the European Data Protection Supervisor Peter Hustinx issued his opinion on the Commission’s communication (clearly some time was needed to mull it over).

He said: "The wide acceptance of RFID technologies should be facilitated by the benefits of consistent data protection safeguards. Self-regulation alone may not be enough to meet the challenge. Legal instruments may therefore be required to guarantee that the technical solutions to minimise the risks for data protection and privacy are in place."

Following on from this, the European Commission last week published draft guidelines, which Reding wants to see adopted by the European Union executive, to be applied in all the bloc's 27 member states. This is described as “soft law”: if those companies using RFID technology don’t regulate themselves based on the rules that the Commission wants to see, more formal legislation will be introduced.

Before this happens, retailers can have their say as part of a public consultation. The draft recommendation is to be put up for consultation for eight weeks, finishing on April 25, 2008. The Commission will then analyse all contributions received before putting forward a draft recommendation for adoption before the summer of 2008.

Even if you are not using RFID at product level, this consultation is important if you think you ever might be. Use of the technology will only get more regulated from here on in.

The Commission’s draft guidelines have called for RFID chips in everything from pets to products to be deactivated at the point of sale to protect purchasers' privacy, unless they explicitly ask for it not to be. It is also encouraging the creation of a common symbol denoting that a product contains an RFID chip so that they cannot be used covertly.

However, the applications of RFID are only just beginning to be explored. The EU itself has funded a three year project – Bridge – to address barriers to implementing RFID technology. The initiative is in its second year and is developing business cases and running pilots, including with retailers.

Those retailers already using RFID at item level for stock control or security purposes are already either removing the tags or deactivating them. In fact, the label on a jumper purchased from Gap in the US also advised me to cut out the label with the RFID tag that was sewn in.

But, in the longer term, killer applications may be developed that require RFID tags to stay enabled after the point of sale. “Smart” products for consumers to use in their “smart” fridges may not prove to be that killer application, but technology has a funny habit of proving useful in ways that it was not at first intended.

Over-regulation now could stifle that innovation.

Complete the consultation questionnaire here.