SCDigest Editorial Staff

The News: Consumer privacy advocacy group CASPIAN (Consumers Against Supermarket Privacy Invasion and Numbering), long considered a thorn in the side of the RFID industry, claimed this week it had met with American Express executives and received a promise that the company would notify consumers if Amex’s new RFID-based technology is used to track their in-store shopping activities.

The Impact: CASPIAN can’t be ignored. The Amex patent filing that was the catalyst for CASPIAN’s concerns does show just how far RFID and related wireless sensor technology can go in terms of real-time tracking at an individual level.

The Story: In February, 2005, financial giant American Express filed an application with the U.S. patent office for what is called a “Method and system for facilitating a shopping experience” (see the American Express RFID patent application here).

It had apparently gone mostly unnoticed until last month, when it came to the attention of Katherine Albrecht, founder of CASPIAN, and author of the book Spychips.

CASPIAN raised concerns about how far the use of RFID chips in American Express credit cards would go in tracking consumer activities in the stores. The system appears targeted at recording shopper movements and behavior, enabled by having tag readers in store shelves pick up signals from the chips in the credit cards, which of course are in turn tied to a specific individual.

A CASPIAN press release said that after a meeting with America Express, it had extracted a promise by the company to review its entire RFID patent portfolio and ensure that any people-tracking plans be accompanied by language requiring consumer notice and consent. It also said Amex would give consumers the ability to “opt out” of RFID-enabled cards.

There was no public confirmation relative to these promises, or the issue at all, from American Express.

The patent application is fascinating, by patent document standards. For example, it suggests that such reading networks could be deployed not only in stores, but "be located in a common area of a school, shopping center, bus station or other place of public accommodation."

Whether this is really part of a strategy, or simple legalese to protect Amex from encroachments to its claimed technology innovation, is unknown.

The patent states that with its approach a "consumer interface [configured to provide a consumer identity signal to a radio frequency identification reader via a radio frequency signal] may also collect and transmit time and location information regarding the path traversed by consumer within the merchant's facility. Such information may be acquired by consumer trackers situated at specific locations throughout the merchant's facility."

The patent also notes that "it may also be desirable to acquire information about consumer behavior and their actions in response to specific stimuli. For example, suppliers of goods may wish to test the effectiveness of specific targeted offers, which may be tailored to individual consumers.”

Privacy advocates often seem to forget that by using the credit card to make purchases, a consumer in effect shares a tremendous amount of information about his or her buying behavior and shopping habits. However, as we’ve noted previously, we don’t think consumers will like being tracked as they move throughout a store.

What is your take on the Amex technology and CASPIAN’s response? Do these kind of tracking capabilities bother you or not? Or is so much already tracked via credit cards purchases currently that the horse has already left the barn?