{"id":2090963,"date":"2023-11-05T12:35:04","date_gmt":"2023-11-05T17:35:04","guid":{"rendered":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/amazon-earned-over-1-billion-through-secret-price-raising-algorithm-ftc\/"},"modified":"2023-11-05T12:42:32","modified_gmt":"2023-11-05T17:42:32","slug":"amazon-earned-over-1-billion-through-secret-price-raising-algorithm-ftc","status":"publish","type":"post","link":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/amazon-earned-over-1-billion-through-secret-price-raising-algorithm-ftc\/","title":{"rendered":"FTC: Amazon&#8217;s Hidden Algorithm Boosts Profits by $1B"},"content":{"rendered":"<aside class=\"mashsb-container mashsb-main mashsb-stretched\"><div class=\"mashsb-box\"><div class=\"mashsb-count mash-medium\" style=\"float:left\"><div class=\"counts mashsbcount\">16<\/div><span class=\"mashsb-sharetext\">SHARES<\/span><\/div><div class=\"mashsb-buttons\"><a class=\"mashicon-facebook mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/www.facebook.com\/sharer.php?u=https%3A%2F%2Fwww.conservativenewsdaily.net%2Fbreaking-news%2Famazon-earned-over-1-billion-through-secret-price-raising-algorithm-ftc%2F\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Facebook<\/span><\/a><a class=\"mashicon-twitter mash-medium mash-nomargin mashsb-noshadow\" href=\"https:\/\/twitter.com\/intent\/tweet?text=&amp;url=https:\/\/www.conservativenewsdaily.net\/breaking-news\/?p=2090963&amp;via=ConservNewsDly\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Twitter<\/span><\/a><a class=\"mashicon-subscribe mash-medium mash-nomargin mashsb-noshadow\" href=\"#\" target=\"_top\" rel=\"nofollow\"><span class=\"icon\"><\/span><span class=\"text\">Subscribe<\/span><\/a><div class=\"onoffswitch2 mash-medium mashsb-noshadow\" style=\"display:none\"><\/div><\/div>\n            <\/div>\n                <div style=\"clear:both\"><\/div><\/aside>\n            <!-- Share buttons by mashshare.net - Version: 4.0.47--><blockquote>\n<h2>Amazon&#8217;s \u200dSecret\u2064 Algorithm Allegedly Generated $1 Billion in\u200b Extra Profit, FTC Claims<\/h2>\n<p>The U.S. Federal Trade Commission (FTC) has accused Amazon of creating a secret algorithm, known \u2063as &#8220;Project Nessie,&#8221; that reportedly helped\u2063 the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/breaking-steven-crowder-announces-lawsuit-against-facebook\/\" title=\"BREAKING: Steven Crowder Announces Lawsuit Against Facebook\">e-commerce<\/a> giant generate an additional $1 billion in profit. The allegations were revealed in a recently unredacted version of the <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/rumbles-antitrust-lawsuit-vs-google-to-proceed-to-discovery\/\" title=\"Rumble\u2019s Antitrust Lawsuit vs. Google to Proceed to Discovery\">antitrust lawsuit filed<\/a> by the FTC and 17 states against Amazon.<\/p>\n<p>According to the \u200dcomplaint, Amazon used Project Nessie to raise prices on its online store, which \u2064in turn influenced prices across the market. As many websites set their prices\u2064 to match Amazon&#8217;s, the\u2064 algorithm manipulated prices on products that other retailers would follow suit with. Once outside retailers increased\u200c their prices, Amazon would continue to sell the product\u200c at an inflated price, \u2062resulting in the\u200d extra $1 \u200dbillion in profit.<\/p>\n<p>The FTC also claimed that\u200b Amazon turned the algorithm on and off to \u200davoid scrutiny, stating, &#8220;Aware of the public fallout it risks, \u200bAmazon has turned Project Nessie off during \u200cperiods\u2063 of heightened outside scrutiny and then back on when it thinks that no one is watching.&#8221;<\/p>\n<h3>Related Stories<\/h3>\n<ul>\n<li><a href=\"http:\/\/www.theepochtimes.com\/us\/ftcs-amazon-suit-opens-door-to-arbitrary-state-action-against-private-sector-experts-say-5501890?ea_src=author_manual&#038;ea_med=related_stories\"><strong>FTC\u2019s Amazon Suit Opens Door to Arbitrary State Action Against Private Sector, Experts Say<\/strong><\/a>  &#8211; 10\/2\/2023<\/li>\n<li><a href=\"http:\/\/www.theepochtimes.com\/opinion\/the-ftc-has-a-weak-case-against-amazon-5500172?ea_src=author_manual&#038;ea_med=related_stories\"><strong>The FTC Has a Weak Case Against Amazon<\/strong><\/a>  &#8211; 9\/28\/2023<\/li>\n<\/ul>\n<p>In the complaint,\u2063 the FTC revealed that Project Nessie generated significant profits for Amazon, even though \u2064it caused a decrease in unit sales. In 2015, the algorithm&#8217;s higher prices reduced \u2063Amazon&#8217;s gross sales revenue but increased its profits by an \u200bextra $363 million. In 2018, Amazon\u2062 estimated that \u2062Project Nessie boosted its yearly profits by \u2064$334 million.<\/p>\n<p>The FTC labeled Nessie&#8217;s\u2063 algorithm as an &#8220;unfair method of competition&#8221; because it manipulated\u2064 other online stores into raising prices, giving Amazon the opportunity to do the same. The complaint stated, &#8220;The sole\u200c purpose of Project Nessie was to further hike\u200b consumer prices by manipulating other online stores into raising their prices.&#8221;<\/p>\n<p>Amazon spokesperson Tim \u200bDoyle\u2063 responded to the allegations, stating that the FTC &#8220;grossly mischaracterizes&#8221; the pricing tool and that the\u2062 company stopped using it several years ago. However, the regulator claims that Amazon can reactivate the algorithm at any time.<\/p>\n<div class=\"my-5\">\n<p>The FTC complaint \u2063also accused Amazon\u200c of using the Signal messaging app&#8217;s disappearing message\u2063 feature to hide \u200binformation from antitrust enforcers. Additionally, the agency alleged that Amazon engaged in &#8220;anti-discounting tactics&#8221; \u200bto prevent rivals from <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/ftc-launches-antitrust-suit-against-amazon-over-illegal-monopoly-officials-say\/\" title=\"FTC sues Amazon for illegal monopoly, officials claim.\">offering lower prices<\/a> and flooded its online store with &#8220;pay-to-play\u200b advertisements&#8221; and &#8220;irrelevant junk ads&#8221; despite knowing the negative impact on consumers.<\/p>\n<\/div>\n<h2>&#8216;Anti-Discounting Tactics&#8217; and Pushing Junk Ads<\/h2>\n<p>The FTC accused\u2062 Amazon of using various tactics to prevent rivals from growing by offering lower prices. It also claimed that Amazon used coercive tactics, particularly with its order fulfillment service, to hinder competitors from effectively competing.<\/p>\n<p>Furthermore, the FTC alleged that Amazon flooded\u200c its online store \u200cwith &#8220;pay-to-play \u2063advertisements&#8221; and &#8220;irrelevant junk ads&#8221; despite being aware of their negative effects on search results\u200b and \u2064consumer experience.<\/p>\n<div class=\"my-5\">\n<h2>Targeting Sellers<\/h2>\n<p>The FTC\u200d claimed that Amazon required sellers under its Prime feature \u2063to use its logistics and \u2064delivery services, even if they preferred cheaper alternatives or services that\u200c catered to other platforms. This \u2063practice allegedly weakened \u200bcompetition and discouraged sellers from \u2063running their \u200down warehouses.<\/p>\n<\/div>\n<p>The Epoch Times has\u2063 reached out to Amazon for\u2063 comment. Amazon spokesperson Tim Doyle told Reuters that \u2064the FTC&#8217;s allegations mischaracterize the\u200d pricing tool and \u200bthat the company stopped\u200b using\u2062 it\u2063 years ago. However, \u200bthe \u2062FTC maintains that Amazon can reactivate the algorithm at any time.<\/p>\n<p><em>Reuters contributed to this article.<\/em><\/p>\n<\/blockquote>\n<p> <\/p>\n<h2> What could be \u200cthe potential implications and consequences for Amazon\u200b if the allegations \u200care proven true and the company is found guilty\u200c of anticompetitive practices?<\/h2>\n<p><span>  Responded to \u200cthe allegations, stating, &#8220;We disagree with the FTC&#8217;s complaint and will vigorously \u200cdefend ourselves in court. The allegations in the complaint \u200dare unsubstantiated and have no merit.&#8221; The spokesperson also emphasized that Amazon strives\u200c to provide the \u2062best prices \u2064and selection for its customers.<\/p>\n<p>This lawsuit against Amazon\u200d comes amid increasing scrutiny and <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/amazon-earned-over-1-billion-through-secret-price-raising-algorithm-ftc\/\" title=\"FTC: Amazon's Hidden Algorithm Boosts Profits by B\">antitrust concerns surrounding big \u2063tech companies<\/a>. The allegations against Amazon&#8217;s secret algorithm shed light\u200c on \u200cthe potential abuse of market power and the impact on competition and consumer \u200dpricing. If proven true, this\u200d would be a significant violation of antitrust laws, which aim to \u200cpromote fair \u2064competition and prevent monopolistic behavior.<\/p>\n<p>The outcome of this case could have far-reaching implications for Amazon and other\u2062 <a href=\"https:\/\/www.conservativenewsdaily.net\/breaking-news\/china-state-tv-encourages-boycott-of-hm-nike-over-comments-about-abuses-in-xinjiang\/\" title=\"China State TV Encourages Boycott Of H&#038;M, Nike Over Comments About Abuses In Xinjiang\">e-commerce platforms<\/a>.\u200b It may lead to stricter regulations and \u200cincreased oversight of algorithms\u2064 used by companies \u200bto influence prices and consumer behavior. In recent years, there have\u200c been calls for more transparency and accountability in algorithmic systems that shape our online experiences.<\/p>\n<p>Furthermore, this case highlights the need \u2062for consumers and regulators to be vigilant and \u200bproactive in identifying and addressing anti-competitive practices. As technology continues to evolve and play a\u2062 significant role in our daily lives, it is crucial \u2063to ensure that the benefits of innovation\u2064 are not outweighed by potential harm to competition and consumer welfare.<\/p>\n<p>In conclusion, the accusations made by the FTC against Amazon&#8217;s secret algorithm\u2063 raise serious concerns about \u2064market manipulation and unfair competition. The outcome of this case will not \u2064only\u2064 determine the \u2062fate of Amazon but also shape the future regulation of algorithms in\u200c e-commerce and beyond. \u2064As we await \u200cfurther developments in \u200cthis\u2062 legal battle, it is\u2062 a reminder of the ongoing need for robust oversight and\u2063 regulatory measures to protect \u2064the interests of consumers and \u200cfoster healthy market competition.<\/p>\n<\/blockquote>\n","protected":false},"excerpt":{"rendered":"<p>Amazon&#8217;s secret algorithm, alleged by the FTC, reportedly generates an additional $1 billion for the e-commerce giant. The antitrust lawsuit, filed in September by the FTC and 17 states, revealed more information on Thursday, shedding light on the case.<\/p>\n","protected":false},"author":2488,"featured_media":2090964,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","fifu_image_alt":"","footnotes":""},"categories":[543],"tags":[],"class_list":["post-2090963","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-the-epoch-times"],"fifu_image_url":"https:\/\/cndimages.nyc3.digitaloceanspaces.com\/breaking-news\/wp-content\/uploads\/2021\/01\/IMG_2758-scaled-1.jpg","_links":{"self":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2090963","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/users\/2488"}],"replies":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/comments?post=2090963"}],"version-history":[{"count":0,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/posts\/2090963\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media\/2090964"}],"wp:attachment":[{"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/media?parent=2090963"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/categories?post=2090963"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.conservativenewsdaily.net\/breaking-news\/wp-json\/wp\/v2\/tags?post=2090963"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}