Online bots can send popular toy prices soaring ahead of the holidays
[WASHINGTON, D.C.] – With holiday shopping underway, U.S. Senator Richard Blumenthal (D-CT), U.S. Senate Majority Leader Charles E. Schumer (D-NY), U.S. Senator Ben Ray Luján (D-NM), and U.S. Representative Paul Tonko (D-NY) introduced the Stopping Grinch Bots Act. The bicameral bill would prevent use of “bot” technology to quickly buy up entire inventories of popular toys and re-sell them at marked up prices. Third-party sellers use bots to manipulate online sales to buy toys, making inventory shortages worse and price gouging families shopping for the holidays.
“Our measure aims to stop cyber Grinches from stealing the holidays,” said Blumenthal. “New tools are necessary to block these online grifters from buying up popular toys to resell them to parents at exorbitant prices. We must have zero tolerance for Grinch bots price gouging hot holiday toys.”
“We cannot allow grinch bots to steal Christmas joy or money from hardworking Americans,” said Schumer. “These cyber scrooges systematically snatch up popular toys and gifts and then gouge parents who are desperate to get their loved ones the gifts they most want. No American should have to fork over hundreds – or even thousands – of excess charges to buy holiday gifts for loved ones, and this critical legislation makes sure that regulators have the tools to go after these bad actors.”
“As the holiday season hits full swing, too many Americans are left vulnerable to the malicious practices of Grinch bots that manipulate the market and inflate prices,” said Luján. “The holidays are a time meant to be spent with family and loved ones. Americans should not be stressed financially by online algorithms that hoard high-demand toys and goods and resell them at huge margins. This critical legislation will protect New Mexico families during the holidays and year-round.”
“Too many Americans have felt the disappointment and frustration of losing a popular toy to Grinch Bots — of spending hours scouring online stores in the hopes of finding an affordable gift or paying exorbitant prices for a single toy,” said Tonko. “These bots don’t just squeeze consumers, they pose a problem for small businesses, local retailers, and other entrepreneurs trying to ensure they have the best items in stock for their customers. Our Grinch Bots Act works to level the playing field and prevent scalpers from sucking hardworking parents dry this holiday season. Let’s pass this bill at once and ensure that Americans can spend their time this holiday season with their loved ones, not competing with Grinches.”
The legislation is supported by Consumer Federation of America, Consumer Reports, and the National Consumers League.
“Consumers shouldn’t have to fight armies of bots to buy the products they want from the online retailers they want to do business with,” said Erin Witte, Director of Consumer Protection for Consumer Federation of America. “We support outlawing sneaky tactics that shady operators use to corner the market on popular items and then charge consumers excessive prices for them.”
“Shoppers shouldn't have to compete with unscrupulous cyber Grinches who use automated bots to snatch up hundreds of products in a matter of seconds and re-sell them at outrageous prices,” said Chuck Bell, Advocacy Program Director at Consumer Reports. “This bill will help stop this predatory practice and create a more level playing field so everyone has a fair chance of buying popular products at reasonable prices when shopping online.”
“Competing with other shoppers for in-demand gifts is frustrating enough for hard-working families,” said John Breyault, Vice President of Public Policy, Telecommunications, and Fraud for the National Consumers League. “Resellers employing bot software can make it almost impossible to check off all the items on consumers’ shopping lists. The Stopping Grinch Bots Act is common-sense consumer protection legislation that gives consumers who just want to buy a present a fair chance against the professional resellers.”
Bots are software programs that can automatically spot and snap up inventory on sale online. In seconds, third-party vendors can purchase hundreds of items, squeezing out parents and children. In 2016, Blumenthal, Schumer, and Tonko’s Better Online Ticket Sales Act (BOTS Act) was signed into law to ban “ticket bots” that intentionally bypass security measures on online ticketing websites to unfairly outprice individual fans. This new legislation would apply the mechanism of the BOTS Act to e-commerce sites to ban bots bypassing security measures on online retail sites.
The text of the Senate bill is available here, and the House introduced a similar version of the bill.