Amazon Used Secret "Project Nessie" Algorithm to Raise Prices
Amazon.com used an algorithm code-named "Project Nessie" to test how much it could raise prices in a way that competitors would follow, according to redacted portions of the Federal Trade Commission's monopoly lawsuit against the company.The algorithm helped Amazon improve its profit on items across shopping categories, and because of the power the company has in e-commerce, led competitors to raise their prices and charge customers more, according to people familiar with the allegations in the complaint. In instances where competitors didn't raise their prices to Amazon's level, the algorithm -- which is no longer in use -- automatically returned the item to its normal price point.Essentially, sellers feel they have no choice but to use Amazon because of its reach, consumer base and logistics prowess, but the company prohibits them from offering their products at a lower price at other
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