Members of Parliament to propose UK bill banning console and GPU scalping

Cal Jeffrey

Posts: 3,165   +872
Staff member
In context: Inflated consumer demand from those staying at home and component shortages, both brought on by the pandemic, have driven the resale prices of consoles and GPUs through the roof. The idea of buying two PS5 or XBSX consoles and selling one for double is appealing, but some are taking it to the extreme.

In December, several parliament members, led by Douglas Chapman, filed an Early Day Motion (EDM 1272) to ban or limit in some way "the resale of gaming consoles and computer components at prices greatly above Manufacturer's Recommended Retail Price." The House of Commons tabled the motion, but continued pressure from constituents has prompted Chapman to force a discussion on the House floor by formally introducing a bill.

Chapman submitted EDM 1272 back in December with 26 signatures. As of Monday, a total of 32 MPs across multiple parties have signed on in support. The proposal was in response to the recent surge of scalping that surfaced with the launch of next-gen gaming consoles. However, once tabled Early Day Motions rarely get brought back up for debate. A formal bill would be the next step in the process.

"Given that experts in the cyber industry now predict the issue of scalping to grow across other important goods and services this year, we are looking at presenting a Bill in Parliament so that we can further explore legislative options to protect consumers from this unfair practice," Chapman told Wired.

Outlawing the resale of items can be a slippery slope as it could limit consumers from selling used or unwanted items. So Chapman is focused on singling out scalpers who use bots to circumvent queues or purchasing limitations, some of which sell the systems for double the price or more online. In at least one instance, a scalping group made purchases even before sales went live.

"The issue of scalping first came up with constituents contacting me to explain their frustration about being unable to get hold of certain games consoles or computer components pre-Christmas," Chapman said in an interview with IGN. "On investigation, we uncovered more details of the unscrupulous practice of 'scalping' by automated bots to bulk buy these goods and sell them on at inflated prices."

Chapman did not say when he would introduce the bill to Parliament.

Image credit: Reuters

Permalink to story.

 

brucek

Posts: 901   +1,305
As many here already know, directly opposing market forces rarely ends up well.

I do see opportunities for more tailored protections against abusing and circumventing retailer e-commerce mechanisms. For example, providing fraudulent identity details to evade "one per household" limits could easily be made illegal if it already isn't (or to up the teeth in enforcement mechanisms.) With the right store structure, use of bots could made irrelevant or in violation of existing anti-tampering laws. It's already illegal to jostle someone out of the way to get the item off the shelf first in the physical world, I think there'd be support for the same idea in the virtual world (although tougher to enforce.)

You could potentially knock major sites like ebay, craigs list, etc out of the game by allowing the retailers/manufacturers to attach a right-of-first-repurchase to all sales, which once documented to those sites would set them up for tortious interference if they continued to participate. But that's getting into trickier waters when viewed in a larger market context, and the volume would just move to small operators.

 

Lionvibez

Posts: 2,433   +2,056
Not surprised the UK is going to do something like this but how are you going to enforce it?
 
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kapital98

Posts: 377   +332
As many here already know, directly opposing market forces rarely ends up well.

I do see opportunities for more tailored protections against abusing and circumventing retailer e-commerce mechanisms. For example, providing fraudulent identity details to evade "one per household" limits could easily be made illegal if it already isn't (or to up the teeth in enforcement mechanisms.) With the right store structure, use of bots could made irrelevant or in violation of existing anti-tampering laws. It's already illegal to jostle someone out of the way to get the item off the shelf first in the physical world, I think there'd be support for the same idea in the virtual world (although tougher to enforce.)

You could potentially knock major sites like ebay, craigs list, etc out of the game by allowing the retailers/manufacturers to attach a right-of-first-repurchase to all sales, which once documented to those sites would set them up for tortious interference if they continued to participate. But that's getting into trickier waters when viewed in a larger market context, and the volume would just move to small operators.

Absolutely. There are small measures that can be taken by businesses to prevent massive purchases. A major problem though is that many of these places already implement the controls you mention (As in most arbitrage situations -- the bots are smarter than the regulations being used).

Fundamentally, this is as simple as the MSRP being artificially low and creating a price ceiling. Due to a fixed supply, and demand that goes beyond that supply at that specific price, it will inherently create shortages.

The only way around shortages is to increase the price. This is exactly what scalpers are doing (though, through transaction costs, there is a deadweightloss in the transaction).

Regulation won't solve this problem. Unless supply increases to meet the MSRP, their will continue to be either shortages (with regulation) or scalpers getting market prices (what's going on right now).
 

brucek

Posts: 901   +1,305
Yes. Regulation can not make more supply appear, and without more supply you're still going to have the same number of people going without.

What it can do is help retailers preserve their traditional pre-scalper role in the distribution of goods. Even if in the most narrow sense a retailer makes the same margin on selling one unit to either an end-user or a scalper, in the larger sense retailers care about their relationship with customers, care about driving customers into their physical or virtual store, and care about having the opportunity to make additional sales at that time and in the future. They do not want their former buyers trained to think of them as useless / always out of stock and starting skipping over them and go directly to ebay instead.

The retailers are already dabbling in anti-bots but not with heavy artillery yet and not with strong legal support. And of course they'd prefer not to have invest in all that. Time will tell if they need to, or if good old fashioned investment in capacity ends up solving the problem soon enough without it.
 

Bulllee

Posts: 226   +151
Puts things into perspective with the Westminster rabble debating this while the UK is on it's knees.
 

McMurdeR

Posts: 344   +343
Puts things into perspective with the Westminster rabble debating this while the UK is on it's knees.

It's games consoles today, but the practice could make its way into other sectors, and it is a genuine worry. It's fundamentally a weakness with the online retailers - there's isn't much encouraging them to take any action. Legislation is needed, to ensure that retailers are offering consumers a fair market, and also to discourage the scalpers themselves, although admitadly that would be harder to do.
 

arrowflash

Posts: 474   +511
Not surprised the UK is going to do something like this but how are you going to enforce it.?

This is a legitimate concern. I'd say at least part of the responsibility should be placed in the hands of manufacturers and retailers (with very clear, detailed and definite guidelines, under penalty of heavy fines and sanctions if they fail to act), since it has become pretty obvious by now that they are all too happy to sell their stock to scalpers.

Obviously there's no 100% infallible scalper-proof method either for physical or online purchases, but everyone in the supply chain should do whatever they can to make scalping as difficult, cumbersome and expensive as possible.

For physical sales, obviously there's little more to be done other than limiting purchases to 1 unit per person during a product's launch period. One idea I just thought of, is that there could be a shared database among retailers where the person's id, picture or biometric data would be registered at the moment of purchase to prevent them from purchasing more units in different stores at the same day, or coming back the next day (I don't think there would be resistance to doing this in Europe but it probably wouldn't be tolerated in the US).

For online sales, online stores and shops could be required to be designed in a way that prevents bot activity and purchases (or at least make it difficult), and block any purchase from accounts where bot activity was detected (I'm saying this as someone with zero knowledge of how online store websites operate under the hood), and of course ordinary purchase limitations - in the case of online sales, you can limit not only 1 unit per customer, but also cross-check to impose only 1 unit per shipping address.
 

Burty117

Posts: 4,235   +2,285
Can someone please explain to me why the basic rules of "cannot send more than two units to a single address" hasn't been implemented, everywhere, months later? It doesn't fix the problem but it makes it much harder to impossible for the Big Scalper Organisations to buy up tons of stock. It at least largely stops the whales out there from existing and it cannot be that hard to add to checkouts on all websites to simply count the quantity to the Address and check if they already ordered 2 of said items that month.
 

brucek

Posts: 901   +1,305
I'm not sure it hasn't been implemented, it's just very easy currently to add bogus extraneous info to an address to make it look different. For example:

123 Main St. Unit 12A (where 123 Main St is a single family house.)

If you did that to fraudulently apply for multiple copies of government financial assistance, you'd likely end up in jail. If you do that to scalp, for now, you're not on the top of anyone's prosecution list.

Depending on how wide and how long this problem goes, that may need to change. In the US, cross-state wire fraud is already a serious felony when the government wants it to be (like when it's the most convenient way to nail a mobster.) For now no one cares when its a sneaker botter.
 

GeforcerFX

Posts: 1,024   +493
While I think more needs to be done by retailers to stop the scalpers from getting the devices in the first place. I think a larger part of the blame lies with the consumers. It's simple, as long as some ***** will pay $2000 for a $900 video card someone will sell that card at $2,000. If people would just wait and only buy a product at it's designated retail price scalping would never be a problem, but for some reason they just can't, gotta be first, can't control the FOMO.
 

Shadowboxer

Posts: 1,717   +1,322
Whenever governments stick their oar in on things like this, they tend to make it worse.

What scalpers are doing is buying and selling. Itā€™s incredibly difficult to stop this without hurting normal businesses and people.

The only things that will resolve this is either increased production, in other words increasing the supply. Or an increase in price - reducing the demand.
 

Lounds

Posts: 921   +814
UK Online retailers such as OCUK are literally adding Ā£100-150 ontop of MSRP prices and all this is doing is pushing scalpers to price even higher. Honestly something needs to happen because they're gonna make the industry crash and most traditional PC gamers will just switch to console (when they can get their hands on one).
 

terzaerian

Posts: 991   +1,437
UK Online retailers such as OCUK are literally adding Ā£100-150 ontop of MSRP prices and all this is doing is pushing scalpers to price even higher. Honestly something needs to happen because they're gonna make the industry crash and most traditional PC gamers will just switch to console (when they can get their hands on one).
If your interest in PC gaming is so shallow that a drought in supply after the worst economic crisis since the Great Depression is enough to break it, you were never a PC gamer, just a temporarily lapsed console drone.

I just built a PC; granted it was from spare, used and new old stock parts, and more of a NAS rather than a dedicated gaming rig, but I got all the silicon bought and shipped for under $100 and paid as much for the ITX case as the rest of it.

Improvise, Adapt, Overcome.
 

Lounds

Posts: 921   +814
If your interest in PC gaming is so shallow that a drought in supply after the worst economic crisis since the Great Depression is enough to break it, you were never a PC gamer, just a temporarily lapsed console drone.

I just built a PC; granted it was from spare, used and new old stock parts, and more of a NAS rather than a dedicated gaming rig, but I got all the silicon bought and shipped for under $100 and paid as much for the ITX case as the rest of it.

Improvise, Adapt, Overcome.
Been pc gaming for 2 decades now, but personally I CBA with the inflated prices. Currently XSX and PS5 offer better value, I'm sure stock will increase quicker than the GPU shortage.