How the Grinch Bots Stole Christmas!: The Pressing Need for E-Commerce Regulation

Image Source: Tim Douglas from Pexels

By Michael Merolla

Michael Merolla is a first-year student at the University of Pennsylvania’s College of Arts and Sciences studying Political Science.

In the 1996 Christmas comedy Jingle All the Way, Arnold Schwarzenneggar and Sinbad ferociously battled each other for an all-important prize: a Turbo-Man toy. [1] The lighthearted film encapsulated the longstanding public perception of Christmas shopping, conjuring images of desperate parents racing through brick-and-mortar stores to fulfill their children’s wishlists. In today’s digital age, millions of American parents now turn to online retailers each year to purchase the season’s most sought after gifts. However, a new competitor has been born from the e-commerce revolution: grinch bots.

Taking after their green, Christmas-hating namesake, grinch bots are automated programs coded to identify trending retail items, particularly during holiday shopping frenzies. After detecting goods that are in high-demand on a specific online marketplace, these bots simulate human users and purchase the entire inventory of the high-demand product. [2] This bad faith practice allows for the programmers behind these bots to list the items for resale with high markups, forcing legitimate customers to either pay these exorbitant premiums or be left empty-handed. 

The growing activity of grinch bots has caught the attention of lawmakers, especially in the hotly contested entertainment ticket market. Signed into law by President Obama in 2016, the bipartisan Better Online Ticket Sales (BOTS) Act sought to prevent ticket scalpers from buying large quantities of event tickets and inflating the prices on the resale market. [3] The BOTS Act prohibits individuals from circumventing ticket-purchasing limits through the usage of automated programs as well as the reselling of tickets obtained through such means on second-hand retailers. In 2021, the Department of Justice and Federal Trade Commission (FTC) imposed millions of dollars in penalties against three resale ticket companies—Just in Time Tickets Inc., Concert Specials Inc., and Cartisim Corp.—for breaking Ticketmaster regulations by using fictitious bot accounts to buy up inventory and disadvantage concertgoers. [4] These arbitrations have remained the FTC’s only arbitration against grinch bot activity.

Political and legal discourse on bot-related legislation entered a dormant period after the passage of the BOTS Act. Then, in November 2022, Taylor Swift and her devoted legion of “Swifties” entered the picture when Ticketmaster (a subsidiary of Live Nation Entertainment) organized a presale of tickets for Swift’s “Eras” tour. Although Swift and Ticketmaster intended for the rollout to be a secure way for fans to access first-hand prices, bad blood arose when the website was overwhelmed by bot attacks, causing glitches and long wait times. [5] The presale turned into a fiasco and was quickly canceled, leaving scores of Swifties outraged and intent on legal action.

A segment of legal professionals within the fanbase organized Vigilante Legal LLC., a name derived from Swift’s hit song "Vigilante Sh-t", to bring formal complaints against Ticketmaster in front of the FTC and the attorney general offices within each U.S. state. [6; 7] Voters of Tomorrow, a youth political activist group, generated an antitrust initiative called "S.W.I.F.T." (Swifties Working to Increase Fairness from Ticketmaster) aimed to "bring together Gen Z organizers to advocate for legislation that would expand federal oversight and prevent future monopolies in the entertainment industry." [8] The scandal ignited multiple class action lawsuits against Live Nation Entertainment, with litigation still ongoing today. [9]

Due to Swift’s popularity, politicians on both sides of the aisle took the opportunity to address issues in the ticketing industry. However, federal lawmakers focused more on the “hidden junk fees” used by ticket companies to obfuscate true prices from consumers than the abuse of bot softwares. Despite this, the Ticketmaster controversy did shift public attention to other bot-related issues, particularly to a bill introduced in 2021: The Stopping Grinch Bots Act.

Sponsored by Senate Majority Leader Chuck Schumer (D-NJ), the legislation was authored by House Representative Paul Tonko, who also worked on the aforementioned BOTS Act. Tonko attempted to apply the structure from the successful BOTS framework to the Stopping Grinch Bots Act, stating that “[a]llowing grinch bots to rig prices and squeeze consumers during the holiday season hurts American families, small business owners, product makers and entrepreneurs. We will not allow this market manipulation to go unchecked.” [10] However, despite the growing public support for grinch bot regulation, this legislation was buried under more pressing issues. After two years of debate, the bill died in committee and never reached the House floor.

The lack of legal protection against grinch bots leaves the American consumer brutally exposed to price manipulation each and every holiday season. Grinch bot software allows Scrooges around the world to abuse the e-commerce markets, costing families their hard-earned cash and fans their priceless memories. If Taylor Swift’s prominence in our cultural zeitgeist could compel lawmakers to protect customers in the live entertainment industry, there is no reason why our greatest holiday memories cannot do the same for holiday retail. Whether it be re-introducing the Stopping Grinch Bots Act or passing a similar bill, it is time for American lawmakers to give consumers the legal recourse to finally put bot programmers on the Naughty List. 

[1] “Jingle All the Way (1/5) Movie Clip - Looking for Turbo Man (1996) HD.” YouTube, July 14, 2015. https://youtu.be/YTcFsdIJ_Xo?si=ovIbTwD0xwYH366x. 
[2] Deeney, James. “Grinch Bots: What Are They & Why Do They Steal Gifts?” Lunio, April 27, 2023. https://lunio.ai/blog/ad-fraud/grinch-bots/. 
[3] Evans, David H., and Dana B. Rosenfield. “Better Online Ticket Sales Act of 2016.” Kelley Drye & Warren LLP, December 19, 2016. https://www.kelleydrye.com/viewpoints/blogs/ad-law-access/better-online-ticket-sales-act-of-2016.  
[4] “Justice Department and FTC Announce First Enforcement Actions for Violations of the Better Online Ticket Sales Act.” Office of Public Affairs: U.S. Department of Justice, January 22, 2021. https://www.justice.gov/opa/pr/justice-department-and-ftc-announce-first-enforcement-actions-violations-better-online-ticket. 
[5] Julian, Mark. “Taylor Swift’s Ticketmaster Meltdown: What Happened? Who’s ...” The Washington Post, November 18, 2022. https://www.washingtonpost.com/business/2022/11/18/ticketmaster-taylor-swift-faq/. 
[6] Schultz, Brooke. “Taylor Swift Ticket Debacle Has Set off a Fan Political Movement to Take down Ticketmaster.” Fortune, November 22, 2022. https://fortune.com/2022/11/22/taylor-swift-ticket-debacle-fan-political-movement-take-down-ticketmaster/.
[7] Tabak, Nicole. “A Group of Taylor Swift Fans Who Are Also Lawyers Is Organizing to Take on Ticketmaster.” Business Insider, November 21, 2022. https://www.businessinsider.com/taylor-swift-lawyer-fans-are-organizing-against-ticketmaster-mergers-2022-11.
[8] Gordon, Eden Arielle. “European Taylor Swift Fans Overwhelm Ticketmaster in Rush for Eras Tour Tickets.” Popsugar, November 18, 2022. https://www.popsugar.com/entertainment/taylor-swift-eras-tour-ticketmaster-drama-explained-49016707. 
[9] Gonzalez, Alex. “Taylor Swift Fans Are Filing a Lawsuit against Ticketmaster.” UPROXX, December 3, 2022. https://uproxx.com/pop/taylor-swift-fans-lawsuit-eras-tour-ticketmaster/. 
[10] “Tonko, Blumenthal, Schumer, Luján Introduce Bill to Stop Cyber Grinch Bots.” Paul D. Tonko, December 21, 2023. https://tonko.house.gov/news/documentsingle.aspx?DocumentID=4049#:~:text=The%20Stopping%20Grinch%20Bots%20Act%20is%20common%2Dsense%20consumer%20protection,up%20inventory%20on%20sale%20online.

The opinions and views expressed in this publication are the opinions of the designated authors and do not reflect the opinions or views of the Penn Undergraduate Law Journal, our staff, or our clients.