Amazon 'Project Nessie' automated price gouging

Occurred: 2019

Amazon used an algorithm to monitor and influence pricing decisions by rival retailers, underscoring concerns about the company's business practices and market power.

Code-named 'Project Nessie', the algorithm allegedly enabled Amazon to test the extent to which it could increase prices and nudge competing retailers to follow suit, helping the company squeeze larger profits from customers and undercut rival platforms. 

According to court documents seen by the Wall Street Journal, Nessie also helped Amazon automatically reduce prices to match its rivals if these platforms offered discounts on certain items.

The algorithm, which is said to have made Amazon over USD 1 billion, was discontinued in 2019. The documents came to light as part of A US Federal Trade Commission anti-trust lawsuit (pdf) against Amazon.

Operator: Amazon
Developer: Amazon

Country: USA

Sector: Retail

Purpose: Monitor & match prices

Technology: Pricing algorithm
Issue: Competition/collusion

Transparency: Governance; Complaints/appeals

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Page info
Type: Incident
Published: October 2023
Last updated: February 2024