Amazon use secret algorithm to inflate prices by $1 Billion, FTC says

Share post:

In a new filing, the FTC alleges that Amazon used a secret algorithm to raise prices on millions of items, generating over $1 billion in excess profits.

The algorithm, codenamed “Project Nessie,” would identify products that other retailers were likely to track and then raise the price on Amazon. If other retailers didn’t follow suit, Amazon would revert the price to its original amount.

The FTC claims that Nessie is an unfair method of competition that led to raised prices for consumers. Amazon says that Nessie was used to stop its price matching from resulting in unsustainable prices.

The FTC also alleges that Amazon founder Jeff Bezos directed company executives to accept “junk” ads as a means of extracting “billions of dollars through increased advertising despite worsening its services for customers.” But Amazon says that its customer experience is consistently positive and that its ads are the most relevant in the world.

The FTC also criticizes Amazon’s Prime membership program, saying that the company has had multiple opportunities to fix flaws in the signup system but has instead continued to “trick more users into signing up” for the service.

The sources for this piece include articles in Reuters and TheVerge.

Featured Tech Jobs


Related articles

China approves Broadcom-VMWare merger, last hurdle is cleared

The long-anticipated merger between Broadcom and virtualization giant VMware has been approved by Chinese regulatory authorities, marking the...

Elon Musk’s X sues Media Matters over report linking ads to extremist content

Elon Musk's X has initiated legal action against the progressive watchdog group Media Matters, in response to an...

OpenAI aggressively pursues Google AI talent with offers up to $10 million

In a bold move to bolster its AI expertise, OpenAI is reportedly offering lucrative compensation packages, potentially worth...

Booths axes self-scan machines for human cashiers

Supermarket chain, Booths is axing almost all of its self-scan machines in favor of human cashiers. The company,...

Become a member

New, Relevant Tech Stories. Our article selection is done by industry professionals. Our writers summarize them to give you the key takeaways