The European Commission has formed a group to provide it with advice about RFID (radio frequency identification), in an effort to avoid the need for regulation of the technology.
The potential growth of the RFID market is "huge," Information Society and Media Commissioner Viviane Reding said at the Cebit trade show in Hanover, Germany. She estimated that the European RFID market will grow from £340 in 2006 to €7bn (£4.79bn)by 2016.
"We're strong in wireless, mobility and chip manufacturing, and we must develop this for RFID," she said. But the commissioner in charge of that area, also warned that industry must pay greater attention to security and privacy issues. "We must make industry aware that the Internet of things must be an Internet for people."
To help with this Reding announced the creation of an "RFID stakeholder group," including representatives from industry and consumer groups. It will provide advice to the Commission, which plans by the middle of this year to propose amendments to the e-Piracy Directive taking account of RFID applications.
Later in the year, the Commission intends to publish recommendations for member states on how to handle data security and privacy issues affected by the use of RFID.
Reding stressed her intention to avoid a "top-down approach," or overregulation, which could hold back RFID development. She pointed to many benefits of smart-tag technology, including billions of euros that companies can save through greater efficiency.
The Commissioner is working closely with government officials in the US, China, Japan and Korea to promote RFID international standards.
"We totally support the efforts of the Commission to bring all the various stakeholders together and, in particular, to help push for global RFID standards," said Antonia Voerste, a spokeswoman for German retailer Metro, one of the largest users of smart-tag technology in the country. "RFID is very much a global issue."