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Senators draft legislation to keep bots from snatching up, price gouging Christmas toys

Photo: WowWee/MGN

This Christmas, people across the country are scrambling to get their hands on the hottest toys of the season only to find they may have to pay a lot more than expected for those items. Three senators are now trying to change that situation.

Tuesday, U.S. Senators Tom Udall of New Mexico, Charles E. Schumer from New York and Richard Blumenthal from Connecticut urged the Federal Trade Commission to take action against what they’re calling “Grinch Bot.”

The bots are algorithms and software used by online scammers to buy popular toys and merchandise at lightning speed and then re-sell the items at gouged prices on sites like Ebay and Amazon.

The New York Times has reported that the Grinch Bots have caused a shortage of popular Christmas toys including Fingerlings, Barbie Hello Dreamhouse and the LOL Surprise Ball.

During a Senate Commerce Committee on Tuesday, a spokesperson for Udall’s office said in a news release that Udall also questioned artificial intelligence experts about how to prevent software bots from taking advantage of internet deals to inflate the price of items.

The three senators plan to introduce legislation to combat the bots in the coming week.

In a letter, the senators asked the FTC to try to find ways to protect customers:

Dear Acting Chairman Ohlhausen and Commissioner McSweeny,

Millions of Americans are turning to online retailers in search of hard-to-find gifts for their family and friends this holiday season. Unfortunately, unscrupulous scammers are also taking note of the limited availability of popular items online, and are succeeding at gaming the system by aggressively deploying cyber bots that automatically spot and snap up the most popular products.

As reported by the New York Times, these bots are able to scoop up the season’s hottest toys before the typical consumer can even log on. They will then turn around and sell these limited availability items at large markups in the remaining shopping days of the holiday season. The profiteers behind these programs are becoming the Grinch bots of the 2017 holiday season - making it more difficult than ever for parents hoping to surprise their children with the ultimate gift at a reasonable price.

We respectfully request that the Federal Trade Commission convene a workshop on the use of bots that usurp technology and purchase large quantities of a particular product, including in-demand toys, with the intent to resell them. We request that you and your staff work with retailers, both online and traditional, to determine ways to protect consumers from high-speed purchases made by bots designed to game the system and take advantage and deprive consumers of online discounts. The Commission should also collaborate with the nation’s 51 Attorneys General to share information and best practices about how to protect consumers from these unfair practices. Such a workshop can help bring much needed attention to this issue, and help retailers and consumers assess the full extent of damage caused by these bad actors. Additionally, we will be introducing legislation in the coming week and hope that we can gain your support for it.

We urge you to act quickly to prevent cyber Grinches from ruining the holiday season this year, and take the necessary steps to prevent these kinds of scams from occurring in the future.

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