By Cliff Peale
The Cincinnati Enquirer

Raising new concerns about the gathering of data on consumer purchases and the possible sharing of that information, privacy advocates are criticizing Procter & Gamble Co.'s push to put computer chips in the packaging of its products.

The smart-tag program already has gained the support of corporate giants such as Wal-Mart Stores Inc., which has mandated that its top 100 suppliers use the tags by 2005 to help it track inventory. At less than a nickel each, the computer chips already are being tested on pallets and shipping cases, helping companies keep store shelves stocked.

But a test this summer of individual packages of P&G's Max Factor Lipfinity lipstick at an Oklahoma Wal-Mart store has raised new criticism.

"Not only would they be reading who buys what, but also who buys which one," said Katherine Albrecht, founder of activist group Consumers Against Supermarket Privacy Invasion and Numbering. "It doesn't matter so much with a can of Coke, but then we start talking about things like a pair of athletic shoes, where it starts to matter a great deal more."

Albrecht started the New Hampshire-based group in 1999 to voice concern over databases compiled by supermarket chains, such as Cincinnati-based Kroger Co., through frequent-shopper cards. Her concern is that as technology advances, companies will know more and more about the behavior of individual consumers.

That raises the possibility that information on individual buying patterns could be shared with marketers or government, which consumers should resist, she said.

Current technology allows the chips to be read from a distance no farther than 15 feet from a scanner. However, privacy advocates fear that future technology might allow information to be tracked while the product is being used by a consumer.

P&G has said the program, known as radio frequency identification, or RFID, is not about violating consumer privacy. Instead, P&G says the information provided by the chip makes the flow of products through the supply chain more efficient and will make products more consistently available on store shelves.

Essentially, the chip can help record a purchase when made by credit card, debit card or check. Then a database awaits the consumer's next purchase of the product, thus tracking frequency of purchase or consumer taste for variants of a product line.

"We're all hoping that RFID will help," P&G chairman A.G. Lafley told investors in late October. "I think it will help, but I don't think it's a magic bullet."

The chips are only about half the size of a dime and P&G said it wants to notify store shoppers that the technology is being used, and provide a way for consumers to disable them.

The chips' cost would have to come down to less than a penny each to be financially viable on individual product cases, P&G spokeswoman Jeannie Tharrington said.

P&G says the industry could move toward item-level packaging. Then a shopper could load items in a cart, swipe a credit card near the electronic reader (which would register all purchases) and then leave the store.

---

E-mail cpeale@enquirer.com