Amazon raises its prices using a secret algorithm according to reports. A new report that just may the limelight details the Project Nessie pricing algorithm of Amazon.
Amazon Raises Its Prices Using Secret Algorithm
Amazon reportedly deployed a secret algorithm to help gauge how high it could raise its prices just before its competitors stopped increasing their prices as well, as per a new report from The Wall Street Journal on Tuesday.
The existence of the algorithm in question, codenamed Project Nessie, was initially revealed late in the previous month in a complaint that was filed by the Federal Trade Commission accusing the e-commerce firm and giant of violating US antitrust law. The public complaint of the FTC alluded to Project Nessie, but the section in question was however heavily redacted. And according to the Journal, Nessie in question would inflate prices and then monitor whether other retailers, such as Target, would follow suit. And if the competing retailers maintained the lower price, the algorithm would automatically revert the retail firm to its normal price.
How Nessie Helped Amazon to Increase Its Profits
Nessie allegedly helped Amazon to increase its profits simply by increasing its prices across different shopping categories artificially until the company reportedly stopped making use of it in 2019.
“We once again call on Amazon to move swiftly to remove the redactions and allow the American public to see the full scope of what we allege are their illegal monopolistic practices,” FTC spokesperson Douglas Farrar revealed to the Journal on Tuesday.
One of the Many Ways the FTC Has Accused Amazon of Illegally Maintaining Its Market Dominance in the E-commerce Industry
Project Nessie as you should know is just one of many ways that the FTC has accused Amazon of illegally maintaining its market dominance in the e-commerce industry. In the agency’s complaint laid in September, the company is reportedly accused of making use of a variety of methods, such as burying listings, in a bid to deter sellers from offering products at a lower price on several competing platforms.
The FTC’s Claim in Its Complaint
“The complaint sets forth detailed allegations noting how Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them,” FTC Chair Lina Khan in a statement in the previous month stated.
Amazon’s Response to the Suit
Amazon responding to the suit, stated that the FTC was “wrong on the facts and the law and we look forward to making that case in court.”
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