Microchip implants chart new territory, but some experts say they are an ethical nightmare

— -- A vending machine software firm recently implanted about four dozen of its employees with Radio-Frequency Identification (RFID) microchips that it says will allow the employees to navigate the office more conveniently. But the move has raised concerns about potential ethical and security issues.

Three Square Market, based in Riverdale, Wisconsin, said it surgically implanted the chips in about 50 volunteers on Tuesday, giving the workers the ability to make purchases, unlock doors, log into computers and perform other office functions with just the wave of a hand. The firm employs 95 workers at its Wisconsin location and has more than 200 other employees stationed around the globe.

Three Square Market’s Chief Operating Officer, Patrick McMullan, estimates that the technology will become standardized within the next decade or so, eventually allowing people use their chips for passports, public transit and various purchasing opportunities. He, too, was microchipped, and said the program was "going well" since its implementation.

"The reality is, it’s coming and it’s coming soon," McMullan told ABC News. "And I think you’re going to see a whole new wave of people who are wanting to get into this.”

The company, which also operates about 6,000 inmate kiosks through its corrections industry business, says the chips are safe and encrypted to protect the user’s data, but some security and technology experts are questioning if the implants are ethical.

Three Square Market says the chips are less invasive than mobile phones and apps, which it says are rich with all types of GPS tracking data.

Michael Zimmer, director of the Center for Information Policy Research at the University of Wisconsin-Milwaukee, said the implants are fundamentally different than other technologies because the user has less control over the experience.

“With my phone, I can turn it off, I can to leave it at my desk and I can control the apps that I have access to,” Zimmer told ABC News. “There are a lot more ways that I can manage what people know about me.”

With the chip implant, “I simply lose that element on control because I can’t turn it off and I can’t just take it out and put it back in,” he said. “I think that’s a fundamental change in the way we control what access people have to our bodies and what we’re doing.”

He’s also worried that the chips could eventually lead to larger scale tracking of one's movements and behaviors -- such as what you purchase or how long you stay in the restroom -- as the technology evolves.

“I think we need to be a little more cautious, making sure that we’re not going too quickly and that we understand the implications,” Zimmer said. “There are some things that we need to make sure we’re paying attention to before we start walking down this path.”

Three Square Market said the chips lack GPS capability and it is not interested in tracking its employees. And the chipping program will never become mandatory for employees, McMullan said.

Microchip implants could cross ethical boundaries “if done recklessly, but we’re not going to be reckless,” McMullan acknowledged, adding that the company would notify its employees if it ever decided to track their behavior or use their data.

However, Michelle De Mooy, a privacy and data expert at the Center for Democracy & Technology, believes the company will gain an "intrinsic understanding of where you were and when" because RFID tags are trackers by design.

De Mooy said many companies have explored external employee tracking and sensor technology in recent years, but she said the implantation aspect is fairly new.

“When you have RFID chips implanted into the body, it really crosses the traditional boundaries of personal space,” De Mooy told ABC News. “It also raises the really profound ethical questions about what an employee should or should not be able to introduce in such a skewed power environment.”

Right now, the chips are mostly being explored for convenience or health benefits, but De Mooy said people should ask companies what they do with the data that’s collected.

“What if they decide to do other kinds of more intrusive tracking -- like sleep tracking or behavioral tracking -- where do the consent mechanisms come into place?” De Mooy asked.

De Mooy said it’s a plus that the chips will be encrypted, which she says can help with security vulnerabilities, but she noted that it is “not a silver bullet for every situation.”

She added, “Think about what we are willing to trade for convenience and what our pound of flesh is worth in this context.”