## Benetton takes stock of chip plan

### By Winston Chai and Richard Shim
Special to CNET News.com
April 7, 2003, 11:48 AM PT

> update Clothing maker Benetton has clarified its plans regarding radio tags in response to reports that it is preparing to place millions of the devices in its products to help track inventory.

> A company spokesman on Monday said the company has to date purchased only 200 radio frequency identity (RFID) chips and is still studying whether or not it will use controversial technology to track its products.

> Spokesman Federico Sartor said there was a misunderstanding about Benetton's use of RFIDs, and though the company didn't think it was a major issue, concern in the financial markets regarding the cost of technology and its benefits caused the company to clarify its position.

> "We are not using any RFIDs in any of our more than 100 million garments today," he said.

> Sartor said Benetton has completed technology tests of radio frequency identification to help improve its supply chain management. However, the clothing maker is still testing the economics of RFID and whether it is cost-efficient to replace the barcode-scanning technology it now uses. Sartor declined to comment on the cost of using RFID in its inventory system, but said a decision concerning whether to use the technology will be made before the end of the year.

> The clarification comes after Philips Semiconductor, a division of Philips Electronics, said in March that it would ship 15 million radio tags for use in Benetton's Sisley line of clothing. The chipmaker announced it was working with system integrator Lab ID and Psion Teklogix to create shelves and mobile devices to bring RFID technology to Benetton.

> Philips did not immediately return calls for comment.

> RFID is considered the future for inventory tracking. Gillette, Wal-Mart Stores and U.K.-based supermarket chain Tesco are also working to install specially designed shelves that can read radio frequency waves emitted by microchips embedded in millions of shavers and related products.

> The use of RFID would allow Benetton to upload inventory information more quickly and easily to its tracking system. For example, it could track a box containing clothes of varying styles, colors and sizes all at once, as opposed to having to checking in one piece at a time.

> Despite the obvious merits, the ability to track a product's movement also raises a disquieting concern about privacy. With RFID tags, it becomes technically possible for marketers to obtain invaluable information on a host of consumer preferences, ranging from the clothes they like to the food they prefer.

> In addition, there are worries that such a technology could be exploited for government surveillance or be misused by hackers and criminals.

> Philips, on its part, has reassured consumers that the clothing can't be tracked beyond Benetton stores and warehouses, as its chips have an operating distance of about 5 feet.

> While the assurance may hold true for now, some industry experts say it is possible for criminals to increase the tracking distance by building a more sensitive RFID signal receiver.

> Such nagging privacy concerns have sparked consumer furor over the initial Philips-Benetton announcement.

> Soon after the announcement, U.S.-based privacy group Consumers Against Supermarket Privacy Invasion and Numbering, lashed out at the international clothing chain and called for a worldwide boycott.

> The group urged consumers to avoid Benetton products until the company publicly renounced its involvement with RFID.

> While it is unclear if Benetton is bowing down to such pressures, the company did say it will consider the "potential implications relating to individual privacy" before firming up its RFID plans.

> CNETAsia's Winston Chai reported from Singapore.

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