According to a document disclosed by the U.S. Federal Trade Commission (FTC), Amazon earned more than $1 billion through a secret algorithm called Project Nessie (Naijatechnews note: currently about 7.32 billion U.S. dollars)
The FTC filed a lawsuit in September this year, but did not disclose the relevant details. The U.S. District Court in Seattle released relevant details of the lawsuit on Thursday, stating that Amazon secretly developed the Project Nessie algorithm to identify products that other e-commerce platforms will follow once Amazon raises prices.
According to the lawsuit, Amazon began testing the Nessie algorithm as early as 2010 to observe how other e-commerce platforms followed up after raising product prices.
The document also shows that Amazon will suspend the algorithm during the Prime Day promotions or the Christmas shopping season. The main reason is that during this period, consumers will pay attention to the selling prices of goods on multiple platforms and may find tricks.
Amazon will restart the Nessie algorithm after the event and expand the product scope to make up for the drop in profits during the e-commerce promotion period.
Indictment documents show that since April 2018, Amazon has raised prices for more than 8 million items with a total value of nearly $194 million, although it paused in 2019.
Amazon retail executive Doug Herrington asked in January 2022 how “old friend Nessie,” with some new positioning logic, could be used to boost profits in Amazon’s retail unit.
The FTC’s complaint also accuses Amazon of trying to conceal information about its operations from antitrust enforcers through the use of the Signal messaging app’s “burn after reading” feature, and says the company destroyed relevant communications between June 2019 and early 2022. .
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