According to a report in The Wall Street Journal, the company used an algorithm codenamed “Project Nessie” to determine how much it could raise prices before rivals stopped raising prices.
The algorithm was first revealed in a Federal Trade Commission (FTC) complaint accusing Amazon of violating US antitrust laws.
Project Nessie automatically raised prices and watched as other retailers, like Target, reacted.
If competitors maintain a lower price, the algorithm will return Amazon’s prices to their original level. It is believed that thanks to this algorithm, the company increases its profits by artificially inflating prices in various product categories.
The retailer reportedly stopped using this tool in 2019.
Source: Ferra
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