Amazon’s secret pricing algorithm, codenamed “Project Nessie,” may have netted the company more than $1 billion in additional profits, according to new details published Thursday of the Federal Trade Commission’s antitrust case against the e-commerce giant.
In September, the FTC and more than a dozen state attorneys general sued Amazon, alleging the company operates an illegal monopoly. Among other claims, the complaint says Amazon buried listings offered at lower prices by other retailers and charged sellers high fees to inflate product prices.
The existence of Project Nessie was first revealed in a previously redacted version of the complaint. Nessie was supposedly an algorithm that would increase the price of products on Amazon and monitor whether other retailers, like Target, would do the same. If they didn’t, the algorithm would revert the Amazon listing to its original price.
Amazon reportedly stopped using Nessie in 2019, but the FTC alleges that the company “has repeatedly considered turning it back on.”
These details were redacted from the original case and partially reported by The Wall Street Journal. A new, redacted version of the complaint was released Thursday, giving the public more information about the FTC’s arguments and evidence. Last month, an Amazon spokesperson said the FTC “got the facts and the law wrong.”
This includes accusations outside of Project Nessie. According to the less redacted complaint, the FTC alleges that Amazon founder Jeff Bezos directed company executives to accept “junk” ads as a means to extract “billions of dollars through increased advertising despite worsening their profits.” services to clients.”
The company’s Prime membership program has also come under scrutiny by the FTC. In the new complaint, the FTC says Amazon had multiple opportunities to correct flaws in Prime’s registration system “and instead continued to deceive more users into signing up” for the service.