Price Gouging in the Cyber Context
An essay on how society shapes the conventions of stock photography and how, by abiding them, stock photogrpahy creats its own aesthetics. Submitted for SOC 3623 (Deviant Behavior and Social Control) on December 1, 2020.
On November 12, 2020, the long-awaited PlayStation 5 Console by Sony launched in the United States. The PlayStation 5’s launch event this year has been rather different from past launches, as the COVID-19 pandemic led Sony’s decision that no retailers shall sell the new console in-store on launch day. That is, if consumers wished to purchase the new PlayStation 5 console, they could only do so online. Despite appearing more convenient and comfortable than waiting in line for several hours in front of a brick-and-mortar store, Sony’s move to online-only retail may have caused more inconvenience and frustration for gamers, as it led to increased activities of price gouging. Using “scalper bots,” which are specifically designed computer programs, some people purchased large quantities of the PlayStation 5 console from retailers, who had extremely limited quantities of the product, within milliseconds (Molly, 2020). They then resold the console at a high profit to regular consumers who were unable to get the console from the retailer because their mouse-clicking speed could not compete with the bots’ automation. In this paper, I will explore price gouging as exemplified in the preceding case of the new console launch as a form of deviant behavior from a sociological perspective.
I was intrigued by the concept of price gouging, especially in the context of gaming and cyber deviance, because not only am I an avid gamer who frustratedly could not get the new console and wanted to know why, I also wish to pursue a legal career in the gaming industry. While the definition of deviance in fields such as criminal justice seems refined, we are only just seeing such a definition taking shape in the cyber world. With an understanding of how the public currently perceives price gouging, I am able to better position my personal trouble of not getting the new console in the context of a greater public issue of price gouging. This knowledge, I believe, will prove valuable to me as a voter and an advocate in shaping the future laws regarding this issue. The practice of price gouging has long been recognized as deviant behavior by formal means of social control, which includes threats of sanctions in the form of monetary fines and imprisonment. Ancient Egypt and Babylonian codes, for instance, contain price control laws, suggesting that there existed price gouging behaviors so deemed undesirable by some as to be banned by law, even several millennia ago (Schuettinger & Butler, 1979). Despite its ancient record, however, it was not until 1979 that the United States first saw its anti-price gouging law officially taking effect. In order to “prevent merchants from taking unfair advantage of consumers during abnormal disruptions of the market,” which in this case was a shortage of heating oil, the state of New York forbade merchants from selling to consumers “foods and services vital and necessary for the health, safety and welfare of consumers … for an amount which represents an unconscionably excessive price” (Laws of New York, 1979). Since then, 36 other states also enacted varying degrees of anti-price gouging laws along a similar line of reasoning, often during times of emergency such as hurricanes and wildfires (Morton, 2020).
Considering reports citing gas priced at $20 per gallon and water at $99 per case in Texas in the wake of Hurricane Harvey in 2017, it is readily apparent why price gouging is, apart from being a state-determined deviance, also seen by the public as an actual, harmful issue that warrants greater public attention (Fox, 2017). Because price gouging is most visible during emergencies, for resources are most scarce during these times, the general public is inclined to see it as a blatant exploitation of those in times of vulnerability and dire need. Examining price gouging from this perspective, one can vividly perceive its contradiction against societal virtues of benevolence and compassion and understand why it is commonly met with scorn.
On the other side of the argument, many economists and libertarians believe the call for state-sanctioned regulations against price gouging is but a result of a moral panic, a term coined by sociologist Stanley Cohen to describe a condition deemed as a threat to “societal values and interests” whose nature is stylized by mass media (1972, p. 9). They argue that, rather than making products in high demand available for more consumers, anti-price gouging laws in truth lead to lower supply of already scarce resources. One supporting argument goes as follows: because lower prices encourage overbuying, those who get to the store first—not necessarily those who need the product the most—will actually acquire the product, which further exacerbates the shortage. This in turn leaves those who are desperately in need of the product even more helpless.
Regardless of one’s stance on price gouging as a general economic concept, it is clear that to socially control merchants to only sell products at a “just price” still requires an arduous debate. Adding on top of that is the popularization of the internet since the 1970s along with a correlated rise in computer-related crimes and deviant behaviors. In this increasingly cyber context of deviance, antitrust concerns like price gouging have garnered less limelight than other more immediately recognizable cyber deviances such as vulnerability in the finance sector, lack of reporting, intellectual property theft, identity theft, sexually related commerce, and cyber scams (Delaney, 2017, p. 242). The reasons for this relative dearth of attention may be three-fold. Firstly, many people are quick to assume that the volatility of the online marketplace is simply part of its nature and should be accepted as such. After all, as exemplified by the curious case in which an obscure romance novel is at one point listed selling for $2,630.52 for a used paperback copy, online shoppers are no strangers to arbitrary prices (Streitfeld, 2018). Secondly, the logistical complexity involved in prosecution of cyber crimes prohibits law enforcement agencies to effectively build a case against price gouging performed by online merchants. The internet bridges sellers and buyers from all corners of the world, apart from differing state laws, differing international laws may also be at play in a cyber crime lawsuit. To reach a holding or agreement on these frequently-conflicting footings are costly both in time and money, so many consumers find it pointless to file a lawsuit in the first place. Lastly, as most anti-price gouging laws only prohibit grossly elevated prices of essential products during times of emergency, consumers can rarely have recourse to them when buying non-essential items or when shopping during regular times.
While still scant, increasingly more regulations regarding cyber deviance are being discussed in D.C. More specifically, the use of “scalper bots,” such as those created to instantly buy out the new PlayStation 5 consoles, are an emergency before the public’s scrutiny. In 2016, then President of the United States Barack Obama signed into effect Better Online Tickets Sales Act, outlawing the use of “bots” to circumvent an online ticket seller’s security and access control measures, such as purchasing limits, for events exceeding 200 attendees (2016). Nonetheless, concert goers are still constantly confronted by the decision of whether to miss out on their favorite artist’s live performance or pay multiple times more on the ticket than its original price. This shows that even if formal means of social control for cyber deviance are in place, they presently do not operate to their full effect.
The situation is even less controlled when consumers try to purchase other in demand items online, because the BOTS Act only covers online event tickets sales. Thus, scalpers buying PlayStation 5 consoles as previously mentioned are not currently bound by formal codes of law. As such, those who have a large stock of the PlayStation 5 consoles as previously mentioned are usually able to list a unit for four times more than the console’s original price. This flagrant price gouging practice has certainly amassed disdain from the gaming community. But judging from their exorbitant pricing, such societal scorn is insufficient in reigning their propensity to commit this deviant act. Nor are the scalpers bound by internal, informal means of control like their own sense of altruism and collectivism, for their goal appears to be the singular pursuit of the highest possible profit.
Yet online customers may not be in a situation as dismal as it appears, because as informal sanctions gain traction, further formal sanctions may be on the way to remedy the discrepancy between supply and demand in the online marketplace. And that is exactly what we are seeing: as hundreds of thousands of tweets condemning scalper bots swarm the internet, mass media has picked up on the signal and published more findings regarding the scalper bots phenomenon. Various news outlets have echoed consumers’ frustration and demanded online retailers to implement more anti-bots measures for high-demand products (Tassi, 2020). Even if retailers refuse to do so, should the public sentiment be as vigorous as it now appears, consumers may very well coalesce and fight for their “just price” as a collective social force.
References
Better Online Tickets Sales Act of 2016. P. L. 114-274. § 3183. (2016).
Cohen, S. (1972). Folk Devils and Moral Panics.
Delaney, T. (2017). Social Deviance.
Fox, M. (2017, August 31). Price Gouging During Hurricane Harvey: Up to $99 for a Case of Water, Texas AG Says. CNBC. Retrieved from https://www.cnbc.com/2017/08/28/price-gouging-during-hurricane-harvey-up-to-99-for-a-case-of-water-texas-ag-says.html
Molloy, D. (2020, November 26). Cyber Monday: Why Bots Will Beat You to In-Demand Gifts. Retrieved from https://www.bbc.com/news/technology-55074383 Morton, H. (n.d.). National Conference of State Legislatures. Retrieved from https://www.ncsl.org/research/financial-services-and-commerce/price-gouging-state-statutes.aspx
Laws of New York. Ch. 730. § 396-r (1979). Schuettinger, R., & Butler, E. (1979). Forty Centuries of Wage and Price Controls.
Streitfeld, D. (2018, July 15). Amazon’s Curious Case of the $2,630.52 Used Paperback. Retrieved from https://www.nytimes.com/2018/07/15/technology/amazon-used-paperback-book-pricing.html
Tassi, P. (2020, November 26). Bots And Scalpers Are Making Finding PS5 And Xbox Series X Stock A Nightmare. https://www.forbes.com/sites/paultassi/2020/11/26/bots-and-scalpers-are-making-finding-ps5-and-xbox-series-x-stock-a-nightmare/?sh=1ad72622238d