The US Federal Trade Commission is cracking down on three New Yorkers for using automated bots to purchase tens of thousands of tickets online with the goal of scalping them.
On Friday, the FTC announced it was collecetively fining the three defendants $3.7 million for buying over 150,000 tickets for music concerts and sporting events and then reselling them at higher prices.
The crackdown represents the first time the FTC has enforced the BOTS Act, a US law passed in 2016 that’s designed to stop people from using automated software to help them scalp tickets online.
We bet you’re hoping the FTC takes the same action against scalpers who’ve harnessed bots to buy up in-demand electronics, such as video game consoles and graphics cards. Unfortunately, the BOTS Act deals exclusively with event ticket sales—not the digital scalping of consumer goods.
When it comes to ticket sales, scalping can be extremely lucrative, as the FTC’s case shows. The regulator claims the three defendants—Simon Ebraini, Evan Kohanian and Steven Ebrani—collectively made $26.1 million in revenue from the ticket scalping, which started in 2017.
The defendants pulled off the scheme by using bots on the Ticketmaster website. The programs—which went by the names Automatick, Tixman and Tixdrop—were capable of repeatedly searching web pages for available tickets and then automatically reserving them.
In addition, the defendants used hundreds of credit cards belonging to fake people, and routed their internet activity to the Ticketmaster page through spoofed IP addresses. “In many instances, Defendants also did not use their address as the primary address, shipping address, or billing address for their Ticketmaster accounts. Instead, they used over 550 addresses that were either fake or unrelated to their business,” the FTC alleged in a court complaint.
The FTC originally planned on fining the defendants more than $31 million. But none of them could pay the amount. So for now, the regulator has suspended demanding the full fine.
We’ve reached out to the FTC on whether it’s probing the scalping of video game systems and graphics cards, and we’ll update the story if we hear back.
