We all know how difficult it has been to get retail in the last year or two. One of the main obstacles to obtaining products affordably is automatic bots which buy up retail quickly and efficiently. Finally, however, lawmakers are offering help in the form of the Grinch Bots Act. So how will bot legislation and sports cards interact?
A group of Democratic members of Congress has introduced legislation to limit the purchasing power of bots on online shopping platforms. Collectors (not to mention flippers) buying retail sports cards online are well aware of the bot problem.
We think of bots as a problem primarily affecting sports cards in the hobby. But in reality, it is a much broader issue. Bots are used to snatch up all sorts of highly desirable products, particularly popular children’s toys.
The lawmakers say there is a real need for a solution to the bot problem:
“Bots are self-running programs that track and buy inventory online. In a matter of seconds, 3rdparty vendors can use them to buy up trending items until they are out of stock.
In previous years, popular toys such as Fingerlings that sold for around $15 sold out at major retail stores, allowing 3rd-party vendors to corner the market & charge vastly more. When the Super Nintendo NES Classic Edition went out of stock on most sites, it started to appear on resale for nearly $13,000 by third-party sellers.
Retailors have tried instituting control measures, but rogue programmers continue to find ways to game the system and flip trending products or services at significantly marked-up prices.”
Many parents and retail outlets have complained that the current supply chain problems experienced by the United States have exacerbated the problem. Consumers are already having difficulty obtaining some desirable gifts for their children. The issues increase demand and prices and further motivate bot activating scalpers to take advantage of the situation.
The Stopping Grinch Bots Act is not intended for the hobby. However, bot legislation and sports cards are related issues. The problem we face in the hobby is quite similar. As we all know, retail products are significantly cheaper than their hobby equivalents. Due to the high demand for retail during the card boom (which is probably over), many third-party sellers tried to corner the market.
Bots were, and remain, an infuriating tool in their arsenal. Bots often snapped up the stocks as soon as it was available, and hobbyists could not find the product they wanted at a reasonable retail price.
The lawmakers behind the move came up with a super cute name for the potential bill: The Stopping Grinch Bots Act. It is filed as H.R. 5263 / S. 2957.
The lawmakers are making clever use of the Grinch metaphor for their legislative agenda. Richard Blumenthal explained the name:
“No longer needing a dog dressed as a reindeer, the modern-day Grinch can simply snatch the hottest toys from behind a computer screen. As families start preparing for the holiday shopping season, Cyber Grinch bots are scooping up hard-to-find toys and then reselling them at outrageous, marked-up costs. Our bill would protect parents from being cheated out of giving their kids the holiday season they saved up for.”
They released a press statement and a fact sheet to explain their motivations. According to the lawmakers’ release, the bill will do the following:
The lawmakers in question include Representative Paul Tonko, members of Congress Richard Blumenthal, and Ben Ray Luján. However, most notably, it has the full cooperation and support of Chuck Schumer, the Senate Majority Leader. All of the lawmakers are Democrats, but as we will discuss below, they hope to attract bipartisan support for the Stopping Grinch Bots Act.
It would outlaw the use of automated bots to purchase goods on retail platforms. However, the language is still up in the air, and there will be a good deal of negotiation over its contents, as lawmakers and special interest groups all provide input.
Violators of the law would face fines and possibly jail time. The act would also call for the cooperation of the retail outlets.
The details of the bill seem to be relatively straightforward. The problem is, we don’t know how and to what extent it will be enforced.
As far as we can tell, the bill will not target crawling services and groups such as Card Brokers. Instead, it is focused on the direct purchase of retail goods by bots. Scraping info is an integral part of market research and investing. Therefore, the law will not target individuals engaged in information gathering.
The bill is not new. In 2019, the same group (minus Ben Ray Luján) tried to pass the bill in time for the holidays.
The attempt was a continuation of a 2016 bill, also promoted by Blumenthal, Schumer, and Tonko. It was designed to curtail bot activity in the event tickets arena. The Better Online Ticket Sales Act was signed into law by President Barack Obama on December 14, 2016.
However, the drive ran into problems. At that time, the Democrats controlled the House. However, Mitch McConnell was the Senate Majority Leader. The Republicans did not have any particular desire to help pass a bill Democrats would get credit for before the contentious 2020 Elections.
We are not a political site. We like to think we are far above that. But the future of the bill will be decided by the bicameral legislature. So, let’s engage in a bit of speculation in that regard.
The bill is a Democratic initiative. That is a good sign since Democrats control the House of Representatives (by a small majority) and the Senate (with no majority at all, but Vice President Kamala Harris can cast a tie-breaking vote). While bi-partisan cooperation on bills is not exactly standard these days, it still happens. Moreover, this is the sort of non-divisive issue that could attract the support of some moderate Republicans.
In addition, the bill has some pretty big heavy hitters behind it, especially with Schumer firmly in support. It also has support from some major consumer organizations. Consumer Reports, the Consumer Federation of America, and the National Consumer League have all vocally favored its passing.
For example, Chuck Bell of Consumer Reports said: “The Stopping Grinch Bots Act will prevent unscrupulous scammers from using shopping bots to purchase and drive up prices for popular products, including toys, gaming equipment, and high-end sneakers. We urge Congress to swiftly take action to protect consumers against this unfair and predatory practice.”
Ultimately, we doubt a heavy hitter like Schumer would back the bill unless it had a good chance of passing.
Experts agree that while this measure will be helpful, it is unlikely to solve issues pertaining to bot legislation and sports cards. It is not clear how it will influence the hobby. We untangle the issue. . Having laws to ban bots is a significant first step. However, the bill’s effectiveness depends on the resources allocated to enforcement.
For example, it was illegal to download copyrighted material in the United States for many years. But only when the FBI started going after downloaders and inflicting heavy punishments did the phenomenon peter out.
It would not be impossible to limit the use of bots severely. If law enforcement shut down the major sites selling and creating bots, they would be far less common. After all, most flippers do not have the knowledge or wherewithal to create their own bots,
Experts also note that greater transparency in the retail industry is also key to the success of anti-bot measures. Enforcement would have to rely on cooperation with giants like Walmart and Target to fulfill its goals.
Bot legislation had sports cards interact in complex ways. There could be unforeseen consequences for the passage of the bill. But in the short term, we don’t believe the bill’s passage will affect the hobby in a meaningful manner.
There are two reasons for that. First, it is unlikely that the measures will be well enforced in the early going. It took 2-3 years before some of the bot ticketing measures reached an operational level of enforcement. Second, the sports card market is not a priority for legislators. Instead, they look to toys and gaming consoles as the main priority.
Nonetheless, if the legislation passes, it will be a milestone in using bots for the sports card market. Once the measure is on the books, retailers will probably comply with regulations quickly. It also allows law enforcement to marshal resources towards the problem.
The effort by influential lawmakers to limit bots may have a limited effect in the short term. But it may signal that time is running out for the outsized role of bots in the hobby. That is, without a doubt, good news for the average collector.