You’ve been there before… your favorite band has announced a concert, and you want to snap up tickets. They go on sale at 9 am, and you have been on the right webpage since 8.30 am. Bang on 9.00 am, the page refreshes and you’re unable to access the page anymore or you’re placed in the queue to purchase your tickets. A few minutes later, you are informed that they are all sold out. You just don’t understand. How can the tickets have sold that quickly? You couldn’t have been any quicker if you tried.
Unfortunately, quicker than any human… are bots – automated software. Meanwhile, on reseller websites, you’ve noticed that the very tickets you were trying to purchase are now being sold at five times the price. It can be infuriating.
The devil at play here is what’s known as a scalper bot. Otherwise known as a scalping bot, this is an automated tool that obtains services and goods – most often those that have greater demand than the market can supply. Bots have the ability to purchase at scale and complete the checkout process at a rapid pace – much quicker than any human customer would be able to do.
We don’t only seescalper botsin the events and ticketing industry, but they are also prominent in the electronics market, sneaker industry, within NFT marketplaces, or any sort of limited purchase marketplace. While they are annoying and present those who use them an opportunity to skip the digital line, the question that a lot of people have is whether they are illegal? Read on to discover everything you need to know.
Before we delve deeper into the existing and evolving bot scalping legislation, it is important to understand why bots are such a massive concern for businesses today. Some of the negative consequences associated with bots are as follows:
Increased infrastructure expenses
If you have to cope with automated traffic to your website, you will be paying for infrastructure and bandwidth that are simply not required. Monitoring and scanner bots can create huge traffic spikes, typically between 10 and 100 times your normal operations, which is going to cost you money unnecessarily as there is cost associated with processing all of the requests that aren’t human.
Loss of revenue
As a consequence of inventory abuse, you won’t be able to service your loyal customers or create new customers, which has long-term consequences on your business and brand reputation. Although you may have accumulated revenue by selling your stock to a bot operator, they are likely not going to have any loyalty to your business and so they won’t come back for extra products unless a profit can be made on the secondary market. They won’t recommend your store to friends either, as genuine customers would. This means you are going to miss out on sizable future revenue, as well as needing to spend more money on attracting genuine customers.
Damaged business reputation
When bots scoop up all of your products, it has a negative impact on the user experience you provide. When people are not able to get your products because of bots, they end up feeling incredibly frustrated. Even though you are not directly responsible for this, it is your business that customers will feel fed up with, as those losing out will take to social media and review to express that you should do more to prevent bad bots from ruining the experience of genuine customers. Therefore, bots can have a bad impact on your company’s brand.
Skewed web metrics
Aside from the negative consequences mentioned so far, fake bot traffic will skew your analytics, which makes it incredibly difficult to understand how genuine customers are behaving while they are on your website. All businesses today rely on accurate data so that they can make the best decisions and campaigns to move their company forward. However, with bots skewing your data, this can make it very difficult when it comes to business strategy and growth.
Slow site speed
Last but not least, bad bot traffic can also slow down your website, introducing latency, which has been proven to lower your online conversion rates. We all know that people crave convenience when it comes to online shopping today. If your website is too slow, users will abandon and look elsewhere, which decreases your conversions and benefits the competition. In fact,site conversion rates drop by an average of 4.42 percent with every extra second of load time.If you are not subverting bots from the checkout or login process, you are going to create friction in terms of the shopping experience you provide for genuine customers. This is something that can have a seriously negative impact on your conversion rates.
The legalities surrounding bot scalping
On December 14th, 2016, President Barack Obama signed the Better Online Ticket Sales Act into federal law. This is commonly referred to as the BOTS Act. The purpose of this act is to prevent attempts by organizations and individuals to automate the process of buying tickets en masse by using scalping bots. These tickets tend to be resold on third-party websites for a profit at a significant markup over face value. This is what we know as ticket scalping.
Before we delve further into this law, it is important to stress that this only refers to ticket scalping, whereas bots are now being used to scalp all sorts of products, from sneakers to games consoles. Therefore, there is a clear gap in the law at the moment, which is something that needs to be addressed.
What are the rules as per the BOTS Act?
The BOTS Act means you cannot use bot technology to purchase tickets and then sell them on. Another important note; it is the resale of these tickets that have been outlawed, rather than bot technology being banned altogether. Again, another gray area that needs to be addressed!
The U.S. Federal Trade Commission enforces this act, which sets a fine of $16,000 for any violations.
Background information about the introduction of the BOTS Act
The United States House of Representatives first introduced this bill in February 2015. The Better Online Ticket Sales Act was established specifically to prevent the circumvention of purchase control and ticket allocation measures that Internet ticket sellers use, ensuring that there is sufficient customer access to tickets for events.
It is believed that one of the events that pushed this Act forward was the 2015 boxing match between Manny Pacquiao and Floyd Mayweather. Prestige Entertainment was sued by Ticketmaster for using ticket bots to purchase almost half of the tickets to this event. They were also sued for purchasing around 40 percent of the tickets to Hamilton, the popular Broadway production.
The Better Online Ticket Sales Act was created to penalize any individual or business who knowingly attempts to circumvent an access control system, security measure, or any other control measure used by a ticker issuer to maintain their integrity or enforce event ticket purchasing limits.
Have any fines been handed out under the BOTS act?
Yes. Although the Bill is still in its infantry, we have seen fines handed out already. The first order under the Better Online Ticket Sales Act sawthree ticket resellers in New Yorkbeing handed civil penalties totaling over $30 million.
Concert Specials, Inc, Cartisim Corp., and Just in Time Tickets, Inc. and their owners were accused of utilizing bots to buy sports events and concert tickets and then selling them at higher prices. It was claimed that they bought more than 150,000 tickets from Ticketmaster, reselling them for millions of dollars in revenue.
The Department of Justice (DoJ) states that the three companies used ticket bots to fool tests that were created to ensure that only human visitors were able to buy tickets.
The proposed ban on console scalping bots
As mentioned, while the Better Online Ticket Sales Act is a good start, it is only the beginning, as it only offers protection in terms of ticket scalping. In addition, any penalties associated with the Act are civil and not criminal.
However, this is only the beginning, as there is talk of a new US bill on the horizon.
A group of US Democrats has brought forward a new bill with the aim of banning the utilization of bots for scalping high-value products, with games consoles being a prime example.
Representative Senator Ben Ray Luján, Senate Majority Leader Charles Schumer (D-NY), Paul Tonko, and Senator Richard Blumenthal are introducing the Bill, which is known as the Stopping Grinch Bots Act.
If this new legislation is passed, it would apply a similar ban on online retail sites as the BOTS Act did in terms of ticket sales, i.e. making it against the law to use bots to purchase stock as soon as it is on the market.
In his announcement regarding the new Bill, Schumer said the following:
“The average holiday shopper is unable to compete with the light speed of the all-too-common Grinch bot and are then held at ransom by scalpers and third-party resellers when trying to buy holiday presents. After a particularly trying year, no parent or American should have to fork over hundreds—or even thousands—of dollars to buy Christmas and holiday gifts for their children and loved ones.”
Legislative initiatives such as this can take a lot of time to work their way through the system, if at all. Time will tell us what happens (or doesn’t) with the Stopping Grinch Bots Act.
What are the laws around the world regarding bot scalping?
The rules and regulations regarding bot scalping and scalper bots differ from country to country, and there are new laws being passed outside of the United States..
For example, in the UK, the Gaming Hardware (Automated Purchase and Resale) Bill was brought to the attention of Parliament in the UK earlier in 2021. Whether this exact legislation comes into play remains unknown. However, the government in the UK has declared that they have already implemented legislation for the purpose of targeting automated bot software use.
Another country that is taking action when it comes to the use of bots is Japan. However, their methods may be a little bit more on the unconventional side. Nojima Denki, a Japanese retail chain, is destroying the packaging for the controller and writing the purchaser’s name on the side of the PS5 box. If others, like Nomjima, buy a console and then resells it, they will not be able to make it appear as new, thus decreasing the selling price. In addition, if they have a name written on the package is an additional deterrent as considerably increases the traceability of a possible scalper.
Traditional methods of bot detection and mitigation are not enough
Scalper bots are some of the most difficult to detect and stop. Their users are highly motivated, collaborative, and intelligent in their methods given there’s a lot of profit to be made. Traditional methods such as CAPTCHA andWeb Application Firewallssimply are not going to be sufficient when it comes to protecting your business. Plus, legacy anti-bot systems often rely on outdated methods that present little to no match to those on the other side of the keyboard.
At Kasada, we’ve taken a modern approach to stop the latest scalper bots without interrupting the user experience. We’ve developed a zero-trust philosophy to detecting bots that ensure bots are stopped in real-time without having to let automated requests into your infrastructure to look for suspicious activity – by then it’s already too late. This approach also stops new bots never seen before as it’s able to detect the underlying automation tools that are used by bots.
We’ve eliminated the need for CAPTCHAs, which can be easily cracked by bot operators. So they present little challenge for stopping bots yet frustrate humans who have to do the work to solve them.
Rather than making users do the work, we make the bots do the work! We use invisible cryptographic challenges as proof of work that makes conducting automated attacks computationally expensive.
Not only do our methods prevent bot attacks right now, but they greatly reduce the chances of your company being targeted at a later date by successfully taking away the economics that make automated attacks profitable.
Final words on scalping bots and protecting your website
We hope that this guide has helped you to gain a better understanding of scalping bots, along with the existing and emerging legislation that surrounds them. If you want to find out whether or not your website is able to successfully detect bad bots and prevent them from making purchases, we have afree, instant bot test. You will receive personalized results that include some of the newer techniques used for creating scalper bots.
