Amazon remains in the crosshairs of the US Federal Trade Commission (FTC): in June it was fined for spying on users through its video surveillance cameras; shortly afterward it agreed to pay a $25 million fine for violating children’s privacy rules through its popular Alexa voice assistant; and now faces the largest investigation in its history for illegal monopoly. The FTC accuses Jeff Bezos’ company of enriching itself at the expense of retailers and customers and is already beginning to show the first evidence. Investigators believe that the company used a secret algorithm to know how far it could increase the price of its products, as revealed by The Wall Street Journal.
According to a report to which the aforementioned newspaper has had access, this algorithm had the code name ‘Project Nessie’. It was used to inflate the prices of Amazon products and monitor whether other retailers, such as Target, followed suit. If competing retailers kept the price lower, the algorithm would automatically revert Amazon’s to its original price.
For the FTC, ‘Nessie’ was instrumental in helping Amazon increase its profits by artificially increasing its prices in different shopping categories. The company supposedly stopped using it in 2019, but its use has been another argument for the regulator to accuse it of violating US antitrust legislation.
FTC spokesperson Douglas Farrar has been very forceful with the e-commerce giant following the discovery: “We once again ask Amazon to act quickly to allow the American public to see the full scope of what we allege are illegal monopolistic practices. ”.
Along with ‘Nessie’, the FTC has listed various methods by Amazon to illegally maintain its market dominance in the e-commerce sector, including the practice of hiding ads to discourage sellers from offering products at a lower price. on competing platforms.
For its part, Amazon has defended itself by saying that the FTC is “wrong on the facts and the law.” The regulatory body, however, accuses the company of “exploiting its monopoly power while raising prices and degrading service for American families who shop on its platform and the businesses that depend on Amazon to reach them.”
