December 5, 2003 8:43 AM PST

Sun sets up European RFID test center

BERLIN--Sun Microsystems will open a facility in Europe where companies can test their radio frequency identification systems.

Sun is set to turn up the heat in the controversial debate over RFID tracking tags by opening a center in Linlithgow, Scotland, where the company's European manufacturing facility is located. There, European companies will be able to test their radio tag ID systems and make sure they comply with regulatory and privacy laws.

The announcement, made at Sun's first European user conference here Friday, signals the company's intention to stake a claim in what is likely to be a lucrative market. In a demonstration Friday, Sun's Chief Executive Scott McNealy checked out a shopping basket of RFID-tagged goods.

The center is due to open in February next year and is an addition to Sun's U.S. facility. Sun maintains that RFID tags have the potential to cut huge costs from the supply chain of retailers and manufacturers. The European center will be designed to help companies tag products, integrate the information into back-end systems and share it with their supply-chain partners, Sun said.

Sun claims that the large, and often undisclosed, losses suffered by manufacturers from theft will be an unstoppable driver for companies to adopt RFID tags as a replacement for the bar code. Gillette, which trialed the tracking tags in its razor blades earlier this year, admits to losing around $30 million a year in theft.

In the United Kingdom, Marks & Spencer and Tesco have both embarked on pilots using RFID tags in clothes, CDs and DVDs.

In the United States, Wal-Mart Stores is set to spend $3 billion on RFID technology, and the retailer has drawn up specifications that its top 100 merchandise suppliers should adhere to by Jan.1, 2005. The new European testing center will allow companies to comply with the Wal-Mart mandate.

Sun's move is unlikely to be popular with privacy groups who, earlier this month, called for the suspension of RFID implementation amid fears that the tags will be used for more nefarious people-tracking purposes once they have left stores with tagged goods.

Sun's chief researcher, John Gage, told Silicon.com that the center will work to make sure the launch complies with privacy laws, but he admitted that more work needs to be done to reassure consumers that the data will not be later used for other purposes.

"People start with one set of motives--like retailers cutting down on pilfering--and then the privacy issues are suddenly seized upon. But there are no decent policy guidelines," he said.

The privacy issue will become much greater with the "inevitable" introduction in the future of DNA-based electronic ID, according to Gage.

"Everything is becoming uniquely identifiable and traceable," he said. "And wait until you get DNA chips, which will happen as the cost plummets."

Andy McCue of Silicon.com reported from Berlin.

 

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