The algorithm — codenamed “Project Nessie” — was used by Amazon between 2015 and 2019, according to newly unredacted portions of the FTC’s antitrust lawsuit against the e-commerce giant.
Amazon allegedly used Project Nessie to predict whether other online stores would follow its lead on price hikes on various products.
Equipped with this information, Amazon would raise prices, wait for other retailers to follow suit and then maintain the higher prices, the FTC said.
“The sole purpose of Project Nessie was to further hike consumer prices by manipulating other online stores into raising their prices,” the agency said in the filing released Thursday.
“The additional profit Amazon attributed to Project Nessie is money that Amazon shoppers would have kept in their pockets if not for Amazon’s use of Project Nessie,” it added.
While the algorithm typically ran continuously, Amazon would pause Project Nessie during the holiday shopping season and Prime Day due to “increased media focus and customer traffic,” according to the filing.
“After the public’s focus turned elsewhere, Amazon turned Project Nessie back on and ran it more widely to make up for the pause,” the FTC said.
Amazon spokesman Tim Doyle said the filing “grossly mischaracterizes” the tool.
“Nessie was used to try to stop our price matching from resulting in unusual outcomes where prices became so low that they were unsustainable,” Doyle said in a statement.
“The project ran for a few years on a subset of products, but didn’t work as intended, so we scrapped it several years ago,” he added.
Read more in a full report at TheHill.com.