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Amazon used a secret algorithm called Project Nessie to essentially dupe buyers out of more money. That’s according to a new report from The Wall Street Journal which details the algorithm and Amazon’s use of it. Project Nessie was initially mentioned in the FTC’s lawsuit filing back in September but much of the information surrounding it was redacted.
So there wasn’t a whole lot of detail about what it actually was and what Amazon was doing with it. Turns out, Amazon was using it to get more money out of shoppers. You may as well look at it as Amazon reaching directly into your pocket and taking money straight out of your wallet. Because the end result is the same.
Based on the TWSJ’s findings, Project Nessie was a way for Amazon to artificially inflate pricing on tons of items. These prices increases were happening across all shopping categories for items that were sold by other retailers. It’s not clear when Amazon started using the Project Nessie algorithm. But the company discontinued its use back in 2019 according to people familiar with the matter.
Project Nessie artificially inflated Amazon prices then monitored for changes at other retailers
Inflated prices on Amazon may not be a shock to some as it may have been suspected. But just like with the redacted information in the lawsuit filing, there was never really any way to tell for sure. That may be changing though with this new information coming to light about Amazon’s alleged monopolistic practices.
The Journal states that Nessie was used to inflate prices on all kinds of items. Then it would monitor the prices of those same items at other big retailers like Target for example. If Target followed in Amazon’s footsteps and raised its price on a particular item, Nessie would leave the inflated price up on Amazon. But in cases where retailers didn’t follow up with an increase of their own, Nessie would automatically revert pricing back down. Potentially so consumers wouldn’t notice that Amazon was briefly charging more money for certain goods.
Nessie was reportedly used for other methods too. According to people from the pricing team and those who worked on the algorithm, Amazon would use it to match promotional sale pricing from other retailers. Amazon using Nessie to match sale pricing from one retailer resulted in other retailers lowering their prices as well. With Amazon’s pricing staying at the lower amount even after the initial retailer sale was over.
Project Nessie is one of numerous complaints the FTC is bringing against Amazon. As the regulator alleges the company is using its stocked coffers and sneaky underhanded tactics to remain dominant in the online retailer market. Amazon has openly refuted these claims. Saying the FTC has its facts wrong.