Amazon.com Inc. (AMZN.O) engaged in a range of unlawful tactics to increase its online retail profits, as revealed by a U.S. Federal Trade Commission (FTC) court document on Thursday, which included the implementation of an algorithm that inflated U.S. consumers' prices, resulting in over $1 billion in extra charges.
Previously filed in September, the FTC's lawsuit had numerous details concealed until this Thursday, when a less redacted version was disclosed in the U.S. District Court in Seattle.
Amazon, boasting a colossal selection of 1 billion products in its digital marketplace, developed a "secret algorithm internally code named 'Project Nessie' to identify specific products for which it predicts other online stores will follow Amazon's price increases. ... Amazon used Project Nessie to extract more than a billion dollars directly from Americans' pocketbooks," according to the FTC.
Tim Doyle, a representative for Amazon, stated that the FTC "grossly mischaracterizes" the pricing software, noting that the company discontinued its use a few years prior.
"Nessie was used to try to stop our price matching from resulting in unusual outcomes where prices became so low that they were unsustainable," Doyle said.
The complaint details that in 2010, Amazon initiated trials of the pricing algorithm to assess whether competitors monitored its pricing strategies and to escalate the cost of goods that were anticipated to be under such scrutiny by rival sellers.
Once it became evident that external merchants were adjusting their prices in response or setting higher prices, Amazon persisted in offering the item at an elevated rate, the FTC contended, leading to an excess gain of $1 billion.
The FTC noted that Amazon temporarily halted the algorithm during high-profile sale periods such as its Prime Day promotions and the festive shopping season, times when there was heightened media scrutiny and consumer focus on the online retailer.
"After the public's focus turned elsewhere, Amazon turned Project Nessie back on and ran it more widely to make up for the pause," the lawsuit said.
In April 2018, Amazon applied the algorithm to determine the prices for over 8 million products bought by consumers, which amounted to nearly $194 million in total costs, according to the complaint. The company then suspended the algorithm's use in 2019.
Doug Herrington, a senior executive at Amazon's retail division, inquired in January 2022 about the possibility of redeploying “old friend Nessie, perhaps with some new targeting logic," as a means to enhance the profitability of Amazon’s retail sector, the complaint alleges.
Furthermore, the FTC's complaint charges Amazon with attempting to obscure details of its internal operations from antitrust regulators by utilizing the Signal application's feature that allows messages to vanish, alleging that the company eradicated communications spanning from June 2019 to early 2022.
Trending Political News
Elementary School Teacher Accused of Raping Students Reveals Shocking Information
An elementary school teacher from Tennessee, alleged to have raped a boy when he was 12, hinted that she might be carrying his child during a phone conversation that was played during court proceedings this week, as per local news sources.
"I'm going to raise this baby. I can do this," was a statement made by Alissa McCommon, a teacher in the fourth grade, during a phone conversation with the victim. This audio was presented in a Tipton County courtroom on Tuesday, as noted by FOX 13 Memphis.
Costco Puts a Limit on Purchases After Quickly Selling Out of New Offering
Whenever Costco lists a certain shiny item for sale online, it's said to sell out rapidly. The wholesaler has made gold bars available on its website, allowing Costco members to invest in them.
"I've gotten a couple of calls that people have seen online that we've been selling one-ounce gold bars," Richard Galanti, Costco's chief financial officer, mentioned to investors in the retailer's fourth-quarter earnings call.
Rapper Reveals How People 'In the Hood' Feel About Trump
Rapper Sexxy Red expressed her opinions about former President Donald Trump's standing in the African American community during a discussion on Tuesday.
During a podcast, host Theo Von inquired of the "Pound Town" artist whether she believed there would be increased support for Trump in the upcoming 2024 elections. An animated reply came from Sexxy Red, also known by her birth name Janae Wherry.
Megyn Kelly Makes Massive Announcement About Her Show
Megyn Kelly, the Sirius XM host, has revealed that she will be interviewing former President Donald Trump on her show “The Megyn Kelly Show” on September 14, marking their first discussion since the notable 2016 presidential election encounter.
This will be Kelly's first one-on-one with Trump in seven years. Her portfolio of interviews includes notable figures such as Republican Florida Governor Ron DeSantis, former UN Ambassador Nikki Haley, and Democratic contender Robert F. Kennedy Jr.
Punishment Handed Down to College Football Player Who Committed Despicable Act in the Middle of the Field
Louisiana Tech's linebacker, Brevin Randle, has been suspended indefinitely following an incident where he stepped on the back of UTEP offensive lineman Steven Hubbard's neck during a game on Friday night. Although Randle wasn't penalized during the match, the event was captured on camera, leading to significant backlash on social media.
"Coach [Sonny] Cumbie and I met with Brevin Randle today and informed him that he has been suspended indefinitely as a result of the incident during last night's game versus UTEP," Louisiana Tech athletics director Eric Wood said in a statement Saturday via ESPN. "In speaking with Brevin, he acknowledges that his action was wrong and understands the consequence of that action.
Al Pacino Gets Bad News From Baby Mama Just 3 Months After She Gave Birth
Three months post the birth of their first child, Al Pacino's partner Noor Alfallah is seeking full custody of the infant.
On Wednesday, in Los Angeles, 29-year-old Alfallah submitted a petition to clarify the parental association involving her, Pacino, and their baby, according to a story by Page Six. This form is traditionally utilized by unmarried pairs to outline the rules concerning custody, financial support for the child, and rights to visitation.