US Trade Commission files lawsuit against Amazon over price hike algorithms

The US Federal Trade Commission (FTC) has filed a lawsuit against retailer Amazon for raising prices using “secret algorithms” reported Reuters agency with reference to the document.

The agency filed the lawsuit in September, but details became known after the document was made public by the US District Court in Seattle on November 2. The company raised prices by more than $1 billion, according to the FTC.

Amazon, as the commission clarified, created “a secret internal algorithm codenamed Project Nessie.” “Although the project is currently on hold, Amazon can restart it at any time. Amazon has repeatedly considered the possibility of re-enabling it – and there are no obstacles preventing the company from doing so,” the agency quotes the FTC statement.

Amazon spokesman Tim Doyle, in turn, said that the commission “completely mischaracterizes” the pricing tool, assuring that the company stopped using the algorithm several years ago. The marketplace began using Project Nessie in 2014, and by 2018, Amazon was using it to set prices for products that customers had viewed more than 400 million times, the FTC alleges.

In January Brand Finance Global 500 published a report according to which Amazon has overtaken Apple to become the most valuable brand in the world. At the same time, at the end of 2022, the retailer lost about $51 billion in value.

As analysts clarified, the drop in the company’s value is associated with an increase in delivery times and, as a result, a decrease in the level of trust in the company from customers. Also, the drop in the company’s value could be caused by a decrease in the need for online stores amid the lifting of coronavirus restrictions and a return to normal life.