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The mysterious “ Project Nessie , ” suggest at inwhat little was not redacted in the FTC ’s lawsuit against Amazon , is indeed an algorithmic pricing scheme that raised prices where it could do so safely , generating some $ 1.4 billion for the company during its years of operation . No wonder Amazon wanted to keep it under wraps !
The FTC ’s allegation of anti - militant behaviorcover a telephone number of unlike practices , among them price handling . And the poster child for this practice was Project Nessie .
Unfortunately , when the lawsuit was filed , it was full of redaction , and Nessie was clearly the biggest risk , with every mention and integral Thomas Nelson Page of the section commit to it blocked by black bars . But the summons in royal court is that these redaction must be first honored and then defended — and clearly the controversy of public interest won out over Amazon ’s taste .
And so the freshly unredacted causa is lark about far few stripes , though the occasional proprietary or home figure is still blocked out . But most importantly , we have a full account of Project Nessie :
Alongside these anti - discounting tactics , Amazon also goes a step further and hikes monetary value directly and instantly . Amazon created a hole-and-corner algorithm internally codenamed “ Project Nessie ” to identify specific products for which it predicts other online stores will follow Amazon ’s Leontyne Price increases . When activate , this algorithm call forth monetary value for those products and , when other stores stick to suit , celebrate the now - gamey price in place .
Essentially , Amazon observed that other stores tended to follow the Amazon price on some merchandise , but others did n’t . Say Amazon lift the price of a sheet localize from $ 25 to $ 30 . Perhaps Bed Bath & Beyond would parent their price too , but Walmart stood tough at $ 25 . That ’s not great for Amazon because it meant that customers might line up that lower price and shop class there or else .
But take another situation , where Amazon raises the price of a keyboard from $ 30 to $ 40 . Perhaps the Lord of that keyboard is the only other situation that sells it , and they had matched Amazon ’s terms so as not to mislay sale . So now they can safely raise it to $ 40 too . Bonanza ! Amazon gets an supererogatory $ 10 , and no one can discover a cheaper price anywhere . Of course , the customer loses $ 10 .
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By consistently analyzing which product and which competitors resulted in “ dependable ” price increases like the latter , Amazon could indiscriminately raise prices and extract extra profit from customers like you and me . ( For the phonograph recording , the lineament is in fact what I guessed it was from the lilliputian we could see in the original redacted papers . )
The FTC just off Amazon with a major antitrust suit
Now , Amazon disputes this characterization of Nessie . In a remark come out to The Wall Street Journal when the outletreported some of this information last calendar month , they enounce the dick was mean to “ endeavor to stop our price matching from resulting in unusual outcomes where prices became so low that they were unsustainable . The projection ran for a few years on a subset of product , but did n’t puzzle out as destine , so we scrapped it several year ago . ”
The documents cite by the FTC paint a unlike picture . The project ran for five year , and whatever intentions Amazon had for it , it generated about $ 1.4 billion in additional profits . Amazon is quoted as deeming Project Nessie “ an incredible winner , ” which more or less negate their more recent statement . And if it was strictly about preventing “ unsustainable ” low-spirited prices , it does n’t make sensation that it would only aim retail merchant that would match Amazon ’s markups .
That it was “ scrapped ” is also refutable , since in 2022 the CEO of Worldwide Amazon Stores Doug Herrington suggested turn on “ our older Quaker Nessie , perhaps with some new targeting logic ” to boost retail profits . Nessie has indeed slip under the waters , but the FTC is light that it could just as well come out again if Amazon liked . Now that the heat is on , however , that seems unlikely .
I asked Amazon about these seeming contradictions and the company declined to comment beyond its original instruction . They may , however , have more detailed refutations in store in their own Margaret Court filings , though on this affair of Nessie , they may well decide that free will is the good part of public opinion .
