Data Monday: First Cases Ever Brought Under BOTS Act
By Charlotte Spencer
This January, the FTC brought the first cases ever under a new law passed five years ago. The BOTS Act, which passed with bipartisan support in 2016, is designed to protect consumers from people who use technology to buy up all tickets for an event before anyone else can, in order to inflate the price.
Many have had the experience of attempting to buy tickets as soon as online sales open, only to find all tickets are already sold out. The only options left at that point are to give up on the event they wanted to go to, or to pay a reseller exorbitant prices for the exact same thing. This happens because a computer program can conduct those transactions faster than human customers.
In the past, original ticket sellers attempted to combat this using their own technology. They would limit sales to a certain IP address, but people would use proxies, or VPNs to disguise their addresses. They would limit the number of sales to each user name or email address, but people would create large numbers of accounts for themselves. They would use services such as captcha, but people would build or buy their own programs for getting around this. As is often the case, the law took a bit of time to catch up with technology, leaving the would-be-customers frustrated by these middle men who charge much higher prices.
In 2016, the law finally did catch up with the technology, making it illegal to run such schemes. The BOTS Act does not ban all bots, just the ones used for this purpose. Not all bots are bad. In fact, you probably benefit from them behind the scenes in a lot of the services you use. The Act does not ban all bots in general, and importantly, also does not ban these types of bots when they’re used for research purposes to help combat the problem. In other words, just as knives are not illegal, but certain uses of knives are illegal, bots are not illegal, but certain uses of bots are illegal. The law also criminalizes selling, or attempting to sell tickets which you knew, or should have known, were obtained this way (15 U.S.C. § 45c).
The FTC filed complaints against three ticket brokers on January 14. Altogether they will be subject to a judgement of more than $31m, partially suspended due to an inability to pay, unless they are later discovered to have misstated their ability to pay. For the first time others considering doing the same thing will see that those who came before them were not actually able to keep any money gained this way, essentially taking away the motivation to copy the practice.
While it may take some time for others to internalize this and start to give up on the practice, consumers should finally begin to see some relief from this annoying practice. By the time concerts and sporting events start to open up again after coronavirus, with any luck, resellers will have finally learned that it’s time to give up on this practice.