Cédric Laurant is policy counsel with the Electronic Privacy Information Center (EPIC) in Washington, DC. In July 2004, he told the US House Subcommittee on Commerce, Trade, and Consumer Protection that "widespread use of RFID tags could enable corporations to track every move consumers make.... By aggregating data to form consumer profiles, corporations could make inferential assumptions about a consumer's income, health, lifestyle, traveling habits, buying habits, etc. This information could be sold to governments to create a dossier of individual citizens or simply sold to other corporations for marketing purposes."

Defenders of the technology have suggested that consumers worried about loss of privacy could simply tear the tags off their packages before leaving the store. However, there are reasons why this may not be practical. First, the technology will allow retailers to track where merchandise was bought, so the tags will have to be intact when processing customer returns. Second, the tags will almost certainly include warranty information that will have to be retained for the lifetime of covered products. With these constraints, it hardly seems likely that consumers will be completely free to remove the tags.

Earl Cox, president of Scianta Intelligence, envisions a new market for data obtained by monitoring trash bins outside consumers' homes. "Legally if you throw something in the trash, it's then public property," he says. "You can go and grab it out of somebody's trash. At [one large university], they teach a course in urban archeology. They go out and rummage through trashcans. They build up a whole composite of a neighborhood based on trash. From a marketing standpoint, something like [RFID] would be very valuable. You could essentially drive down a back street, walk down an alleyway, just hire people to do it three or four times a day." Adds Cox, "You can build a pretty accurate statistical profile of the demographics of people's age, gender, education, disposable income—all this stuff."

Given that RFID may soon allow manufacturers to determine who drinks beer during football games, Richard Gerstman believes consumers will start asking for something in exchange for this information. "The manufacturers will eventually start working out deals with people where consumers can get beer much cheaper or they can get free purchases for some of their beer in exchange for this information," he says. "I think there's going to be more negotiation going on in the future. Advertisers and marketers will be able to get a lot of information from people about their habits by negotiating for information."

But Thomas Hine, author of The Total Package, is not so sure. "People don't want to negotiate," he says. "When Priceline.com was allowing bidding for groceries and gasoline, it just didn't work. People didn't want to have so much uncertainty and emotion to win a tank full of gasoline or to get so much off on a package of Cheerios. It was madness." Hine adds, "The way you sell things is by having people not think very much."

Randall Frost, a freelance writer based in Pleasanton, California, is the author of The Globalization of Trade. His work has appeared in Worth, The New England Financial Journal, CBSHealthWatch and a variety of educational publications.