Amazon has apparently made a killing in revenue from its Project Nessie algorithm. Nearly a month ago it was reported that Amazon was using a secret pricing algorithm called Project Nessie to artificially inflate prices and increase its revenue. Prior to that, Project Nessie was discovered but the full scope of what it was and what it was doing for the massive online retailer wasn’t clear.
That information came out as part of Amazon’s antitrust trial with the FTC. Which is suing Amazon for allegedly operating an illegal monopoly. While the lawsuit includes many different alleged infractions, Project Nessie is a major focus. As it appeared to have been at the center of a lot of Amazon’s potentially shady business practices. According to details from the previous reports, it indeed played a big role in Amazon’s business until Amazon stopped using it back in 2019.
It’s goal was to increase prices of popular products across basically every major product category. Then monitor prices for those same products for other retailers. And if prices didn’t increase, it would automatically lower them back down quietly. Prices that did raise at other retailers stayed high at Amazon. Causing consumers to pay more than they should have. Even though Amazon has allegedly stopped using this algorithm four years ago, it already made a boatload of money from it.
Amazon made $1 billion in revenue from Project Nessie
According to a new report from Reuters, Amazon made $1 billion in revenue by using this tool. Details of the amount Amazon made from inflating prices is part of a new version of the lawsuit. When the lawsuit was filed back in the beginning of October much of the information was redacted. But the FTC has released an updated version where a lot of those details are now public. This includes how much money Amazon made. But also that Amazon forced sellers to use its logistics and delivery options if they were selling under the Prime label. Seller fees also reportedly increased up to 39.5% by 2018.