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Amazon finds itself under the FTC’s microscope as the federal agency scrutinizes the e-commerce giant’s business as part of its lawsuit against Jeff Bezos’ company. The latest allegations include that the company used a secret algorithm, dubbed “Project Nessie,” to manipulate prices and expand the company’s profits.that in a world where e-commerce has become synonymous with convenience, Amazon is facing a massive lawsuit filed by the FTC alleging a.
An Amazon spokesperson defended the initiative, stating, “Project Nessie was a project with a simple purpose—to try to stop our price matching from resulting in unusual outcomes where prices became so low that they were unsustainable. The project ran for a few years on a subset of products, but didn’t work as intended, so we scrapped it several years ago.”
However, the FTC’s lawsuit paints a different picture, alleging that the practice “extracted from American households” a significant amount of money and facilitated the generation of a redacted sum of “excess profit.” Asource claims that Amazon accrued more than $1 billion in revenue through the utilization of this algorithm.
The ramifications of “Project Nessie” extend beyond mere pricing adjustments. The FTC’s complaint underscores a broader impact, suggesting that Amazon’s monopoly power has had a widespread influence on elevating consumer prices across the retail sector. This is particularly pertinent in the context of third-party sellers on Amazon’s platform, who, according to the FTC, often find themselves ensnared in a predicament where they are compelled to elevate prices for consumers.
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