[WASHINGTON, DC] – U.S. Senators Richard Blumenthal (D-CT), Chuck Schumer (D-NY), and Tom Udall (D-NM), and U.S. Representative Paul Tonko (D-NY) released draft legislation to crack down on cyber grinches using bot technology to snatch up large batches of hot holiday toys in order to resell to parents at unfair, inflated prices.
Third-party sellers are deploying cyber bot technology to game online sales systems in order to buy out inventory of hot toys. Some toys – like Fingerlings and Barbie Hello Dreamhouse – have become nearly impossible to purchase online or in stores at retail price, in part because third-party sellers have snatched up inventory to resell online at exorbitant prices.
“The joy of the holiday season is too often tarnished by the unscrupulous actions of cyber grinches – who cheat the system to scam consumers of their hard-earned money. Cyber bots clear the shelves, then drive up exorbitant online prices, shutting out countless parents seeking the perfect gift for their children. Our legislation would stamp out these bots and put consumers back in charge,” said Blumenthal.
“Grinch bots cannot be allowed to steal Christmas, or dollars, from the wallets of New Yorkers,” said Schumer. “Middle class folks save up—a little here, a little there—working to afford the hottest gifts of the season for their kids but ever-changing technology and its challenges are making that very difficult. It’s time we help restore an even playing field by blocking the bots. When it comes to purchasing products online, major retailers should put forth policies that will help prevent future Grinch bots from stealing the season’s hottest toys.”
“Parents in New Mexico and across the country save up so they can surprise their kids with gifts at the holidays -- we can’t let these Grinch Bots steal Christmas,” Udall said. “Regular people can’t compete with the speed of automated bots. Our legislation builds on the BOTS Act for concert tickets and events so scalpers can’t game the system and bypass purchasing limits on websites.”
“People work hard and save money all year so they can afford to purchase toys and gifts for their loved ones and products for their homes and everyday lives,” said Tonko. “They should be able to spend the holidays with their families, not stuck hovering over their online devices hunting breathlessly for one affordable toy that will make them a hero to their kids. Allowing these manipulative buyer bots to continue to rig the retail market and squeeze consumers isn’t just a problem during the holidays. It hurts the small business owners, entrepreneurs, innovative product creators and all retailers throughout the year that respect and appreciate their customers. This legislation backs consumers in this new and growing fight against the abusive use of retail bots.”
The lawmakers' efforts have received support from national retail organizations, including the National Retail Federation and the Retail Industry Leaders Association. Blumenthal, Schumer, Udall, and Tonko will continue efforts to build support for and finalize the legislation. No date or deadline for introduction has been set.
Bots are software programs that can automatically spot and snap up inventory offered for sale online. In a matter of seconds, third-party vendors can purchase hundreds of items, squeezing out parents and children. Last year, the Senate passed Blumenthal and Schumer’s Better Online Ticket Sales Act (BOTS Act) to ban “ticket bots” that intentionally bypass security measures on online ticketing websites to unfairly outprice individual fans. The draft legislation announced by Blumenthal, Schumer, Udall, and Tonko would apply the structure of the BOTs Act to e-commerce sites, to ban bots bypassing security measures on online retail sites.
"NRF and the retail industry share the members’ concerns, and we look forward to working with them and all interested parties to strengthen enforcement against bad actors and take away the tools being used against innocent consumers, particularly during the holiday season,” said David French, Senior Vice President for Government Relations, National Retail Federation.
Nick Ahrens, Vice President of Privacy and Cybersecurity at the Retail Industry Leaders Association said, “RILA appreciates Senators Schumer, Blumenthal, and Udall, and Representative Tonko’s focus on this issue. With the holiday shopping season in full swing, America’s retailers are doing everything they can to make sure American consumers have a great shopping experience and access to the season’s hottest items. Retailers also want to ensure that items purchased from their stores and online are purchased legitimately. The industry will continue taking precautions to protect consumers and mitigate fraud and theft. We look forward to working with the bill’s sponsors to perfect this legislation in the next year.”