Amazonfaces allegations from the U.S. Federal Trade Commission ( FTC ) of wielding price - gouge algorithms through an operation called “ Project Nessie ” according tocourt documentsfiled Thursday . The FTC say the algorithm has bring forth more than $ 1 billion in excess profit for Jeff Bezos ’s e - commerce giant .
Online stores match Amazon ’s pricing to make certain they ’re getting the grocery store Leontyne Price for their product . Amazon allegedly used an algorithm from 2015 to 2019 to figure out which products were being cost - check and then nurture the prices of these products , accord to the FTC . This allow Amazon to not be undercut by challenger while at the same fourth dimension invoke prices for the whole industry . The FTC say Amazon turns the algorithm , called Project Nessie , off during periods of heightened public examination , but internally calls the operation “ an unbelievable success . ”
“ From 2015 to 2019 , Amazon deployed a secretive scheme that induced other on-line stores to raise their prices and allowed Amazon to extract extra net profit from shopper , ” say U.S. prosecutors in a filing . Project Nessie is currently off , but regulator allege online stores watch Amazon ’s price increases at least 20 % of the time .
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Amazon spokesperson Tim Doyle says the FTC ’s claim about Nessie “ grossly mischaracterizes this tool . ”
“ Nessie was used to judge to cease our price matching from leave in strange outcome where prices became so low that they were unsustainable , ” Doyle said in a instruction . He says the project was scrapped several years ago because it did n’t run as intended .
The case also claim Amazon shutter a servicing called ‘ Seller Fulfilled Prime ’ ( SFP ) in 2019 , which allowed 15,000 sellers to ship products themselves , rather of using Fulfillment by Amazon . The program was praise by trafficker , but created competitive fulfillment services , so Amazon shuttered the program to make all marketer reliant on Amazon for shipping , sound out the FTC .
Amazon counters the FTC ’s statements , say SFP was “ far below the gamy standards and expectations our customer have for Prime ” in a statement . An Amazon spokesperson called the FTC ’s figure “ misleading ” , and says an improved version of SFP is now heart-to-heart to sellers .
AmazonE - commerceJeff BezosU . S . Federal
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