On Friday, the Federal Trade Commission announced that it fined three scalping companies for using bots to acquire sports and concert tickets. The scalpers allegedly circumvented purchasing limits through software, which is a violation of the Better Online Ticket Sales (BOTS) Act.
The three companies combined bought up more than 150,000 event tickets at the standard rate between 2016 and 2020 and sold them at a steep markup. They raked in an estimated $26.1 million in profit from the illegal resales.
“Not only does this deprive loyal fans of the chance to see their favorite performers and shows, it is against the law,” said the FTC’s Consumer Protection Bureau Director Andrew Smith.
Because the BOTS Act is a per-violation law, the scalpers collectively faced fines of over $31 million. However, due to their inability to pay, each company got off with significantly reduced penalties.
Concert Specials, Inc had $16 million in violations, which was reduced to not quite $1.6 million. Just In Time Tickets was looking at $11.2 million in fines but pleaded down to $1.6 million. The FTC levied $4.4 million in penalties at Cartisim Corp, but reduced its fine to about $500,000.
The settlement comes to approximately $3.7 million, an 88-percent reduction in fines. As part of the agreement, the companies will also be required to maintain permanent records going forward showing they are in compliance with the BOTS Act. A district judge still has to sign off on the settlement.
The FTC notes that this is the first time it has applied the BOTS Act since it was enacted in 2016. The law only applies to using software to buy event tickets, but from scalpers’ continued use of bots to buy up PS5 and XBSX consoles, it seems high time that Congress look into expanding this legislation to include other industries.