The end of privacy? Tiny devices attached to everything you buy could put you under extensive surveillance.(CR INVESTIGATES)

Oh for the good old days when Big Brother merely watched you. Soon he'll be coming home with you in what you buy, wear, drive, and read. Radio Frequency Identification-a wireless technology that allows objects and people to be tagged and tracked-is taking its place in the panoply of tools that business and government can use to collect information about you.

The RFID tags contain microchips and tiny radio antennas and are embedded in products or stuck on labels. They transmit a unique identifying number to an electronic reader, which in turn links to a computer database where information about the object is stored. Unlike bar codes, however, radio tags can be read surreptitiously from as far away as 750 feet for toll passes. (See "How These Tags Work," page 34.)

Radio tagging is not science fiction. For years, railroads and the U.S. Department of Defense used radio tags to track inventory. The difference is that now tags are showing up in contactless payment cards such as Chase's Blink or MasterCard PayPass, on individual items at Wal-Mart and Best Buy, in library books, and in U.S. passports. As a measure of the industry's explosive growth, consider this: Through early 2006, cumulative sales of all radio tags totaled 2.4 billion. But in 2006 alone, analysts forecast sales of 1.3 billion tags. 2015, they could top a trillion.

But a new technology brings new questions. Could a high-tech thief "break into" the tags and cull your banking or medical information? And what about your privacy? In May 2005, the U.S. Government Accountability Office's report on RFID concluded that "once a tagged item is associated with a particular individual, personally identifiable information can be obtained and then aggregated to develop a profile." Retailers today routinely link bar codes on items shoppers buy with personally identifiable information from their credit, debit, or store-loyalty cards, a practice that is likely to continue as radio tags replace bar codes. With tags on every item you own, from shoes to hats, all of them capable of broadcasting to a database that can be linked to your credit card, the potential for corporate and government snooping rises to a new level.

Writing in RFID Journal, an industry publication, Elliot Maxwell, special adviser for the digital economy to the U.S. Secretary of Commerce from 1998 to 2001 and former chair of the international public policy advisory council for the Auto-ID Center, an industry-funded group that helped commercialize RFID, said, "This is not the world of centralized data collectors politely asking permission from data subjects. It is a seemingly chaotic world with billions of data collectors that may be always on, where it will be more difficult to know who is gathering what data, who has access to it, what is being done with it, and who should be held responsible for it."

Mark Rasch, former head of the computer-crime unit for the U.S. Justice Department and senior vice president of Solutionary, a computer-security firm in Bethesda, Md., is blunter: "RFID is the electronic equivalent of allowing everyone to snoop through your medicine cabinet."

RFID proponents argue that privacy concerns are overblown. "Corporations, even if they're self-interested, know that the way to make money generally is to do the right thing, so they won't alienate customers by violating their privacy," says Mark Roberti, editor of RFID Journal.