by Helena Kelly and Keith Griffith at Daily Mail
- Amazon has been accused of adopting algorithm which tested whether competitors would follow suit when it raised the price of a product
- ‘Project Nessie’ tactic was deployed until 2019, according to new claims from an anti-trust lawsuit filed by the FTC
- READ MORE: FTC sues Amazon accusing the online retailer of wielding monopoly power to jack up prices
Amazon has been accused of adopting a secret algorithm to raise prices in a way competitors would follow helping to boost their revenue by $1 billion, insiders claim.
The tactic – dubbed ‘Project Nessie’ – effectively tested new price points on its products to see if it would encourage competitors to follow suit. If they did not, Amazon would automatically return the item to its previous cost.
The bombshell claims form part of an anti-trust lawsuit filed by the Federal Trade Commission (FTC). The suit centers around concerns Amazon – which is owned by Jeff Bezos, the third richest man in the world – has stifled competition in the market and harmed consumers by driving up prices.
In redacted extracts from the filing, seen by the Wall Street Journal, former employees claimed the ‘Nessie algorithm’ also helped to identify discounted prices being offered by competitors.
For example, if Target.com lowered the price of a product, Amazon would then match this low cost encouraging other retailers to do the same…
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