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“Project Nessie” — Report: Amazon made $1B with secret algorithm for spiking prices Internet-wide Report reveals details about Amazon’s secret algorithm redacted in FTC complaint.

Ashley Belanger – Oct 4, 2023 8:50 pm UTC EnlargeBloomberg / Contributor | Bloomberg reader comments 74 with

Last week, the Federal Trade Commission sued Amazon, alleging that the online retailer was illegally maintaining a monopoly. Much of the FTC’s complaint against Amazon was redacted, but The Wall Street Journal yesterday revealed key details obscured in the complaint regarding a secret algorithm. The FTC alleged that Amazon once used the algorithm to raise prices across the most popular online shopping destinations.

People familiar with the FTC’s allegations in the complaint told the Journal that it all started when Amazon developed an algorithm code-named “Project Nessie.” It allegedly works by manipulating rivals’ weaker pricing algorithms and locking competitors into higher prices. The controversial algorithm was allegedly used for years and helped Amazon to “improve its profits on items across shopping categories” and “led competitors to raise their prices and charge customers more,” the WSJ reported.

The FTC’s complaint said:

Amazon uses its extensive surveillance network to block price competition by detecting and deterring discounting, artificially inflating prices on and off Amazon, and depriving rivals of the ability to gain scale by offering lower prices.

The FTC complaint redacted this information, but sources told the WSJ that Amazon made “more than $1 billion in revenue” by using Project Nessie, while competitors learned that “price cuts do not result in greater market share or scale, only lower margins,” the FTC’s complaint said.

“As a result, Amazon has successfully taught its rivals that lower prices are unlikely to result in increased salesthe opposite of what should happen in a well-functioning market,” the FTC alleged.

Amazon stopped using the algorithm in 2019for no clear reason, sources told the WSJ.

FTC spokesman Douglas Farrar told the WSJ that the agency wants more public access to redacted information in the complaint and continues to “call on Amazon to move swiftly to remove the redactions and allow the American public to see the full scope of what we allege are their illegal monopolistic practices. Advertisement

Amazon’s spokesperson Tim Doyle told Ars that the FTCs allegations grossly mischaracterize this tool.”

“‘Project Nessie’ was a project with a simple purposeto try to stop our price matching from resulting in unusual outcomes where prices became so low that they were unsustainable,” Doyle said. “The project ran for a few years on a subset of products, but didnt work as intended, so we scrapped it several years ago.

In a blog responding to the FTC’s lawsuit, David ZapolskyAmazon’s senior vice president of global public policy and general counselwrote that the FTC fundamentally misunderstands how retail markets work. Zapolsky said that “matching low prices offered by other retailers” has not “somehow” led “to higher prices.”

“Thats not how competition works,” Zapolsky wrote. “The FTC has it backwards and if they were successful in this lawsuit, the result would be anticompetitive and anti-consumer because wed have to stop many of the things we do to offer and highlight low pricesa perverse result that would be directly opposed to the goals of antitrust law.

According to the FTC’s complaint, “Amazon recognizes the importance of maintaining the perception that it has lower prices than competitors,” but that Amazon designed Project Nessie specifically “to deter other online stores from offering lower prices than those of Amazon.”

In a press release, the FTC confirmed that it intends to prove that Amazon is “stifling competition on price,” among other alleged consumer harms.

“Amazons far-reaching schemes impact hundreds of billions of dollars in retail sales every year, touch hundreds of thousands of products sold by businesses big and small, and affect over a hundred million shoppers,” the FTC’s press release said.

“Seldom in the history of US antitrust law has one case had the potential to do so much good for so many people,” John Newman, the deputy director of the FTCs Bureau of Competition, said. Page: 1 2 Next → reader comments 74 with Ashley Belanger Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience. Advertisement Channel Ars Technica ← Previous story Next story → Related Stories Today on Ars

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Crow-Armstrong stays hot vs. hometown Dodgers

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Crow-Armstrong stays hot vs. hometown Dodgers

CHICAGO — Most players are happy to be done facing the Los Angeles Dodgers, but Chicago Cubs center fielder Pete Crow-Armstrong might not be one of them.

The Los Angeles native has torched his childhood team this season, including Wednesday night at Wrigley Field when he went 3-for-4 with a home run, two stolen bases and a career-high four RBIs, helping the Cubs to a 7-6 win. It came one night after Chicago beat L.A. 11-10, with Crow-Armstrong contributing another home run.

He was asked Wednesday whether his production has special meaning coming against the team he used to root for.

“Absolutely,” he said. “I mean, they are regarded as the best, and I think we’ve enjoyed being able to show that we’re right there with them, and yeah, it’s always a little extra special for me getting to do it against the team I grew up going to see.”

Crow-Armstrong erased a 2-0 Cubs deficit with an opposite-field, three-run homer in the fourth inning, then added a run-scoring single an inning later, which turned out to be the final run of the night for the Cubs.

Overall, he had four home runs and nine RBIs in the seven-game season series against the Dodgers, which the Cubs won 4-3 after losing the first two games in Japan in mid-March. But that was before the Cubs’ offense took off. They’re averaging an MLB-high 6.3 runs per game.

Crow-Armstrong’s season took off as well, starting over a week ago when the teams met in Los Angeles. In the 10 games since, the 23-year-old is hitting .400 with five home runs.

“He needs to send me a bottle of wine or some golf balls with all the success he’s had,” Dodgers manager Dave Roberts quipped before Wednesday’s game.

Roberts and Crow-Armstrong exchanged pleasantries before the first game of the series, as the second-year player is friends with Roberts’ son, Cole. The two played against each other growing up.

“I got a couple different connections to Doc,” Crow-Armstrong said. “He’s so great.”

That’s the same word Crow-Armstrong’s teammates are using about him as he continues to impress both at the plate and in the field. According to ESPN Research, he’s the fastest player in Cubs history to reach five home runs and 10 stolen bases, doing it in 26 games.

Plus, his pitchers love seeing him patrol center field.

“Defensively, I got to say he’s probably the best,” Wednesday’s starter, Matthew Boyd, said. “And what he’s doing at the plate is no surprise.”

Crow-Armstrong showed signs of breaking out late last year but then struggled early this season before locking in during the Cubs’ most recent road trip. He said he got “on-time” with his swing while learning how to deal with failure better. He was asked how satisfied he is with his game right now.

“If it comes out in a win, it’s very satisfactory,” he said. “It makes me feel very content. I love being able to impact it in any way I can.”

So does his manager, who called Wednesday a “wonderful game” for Crow-Armstrong.

“He made his presence felt in a big way for sure,” Craig Counsell said.

Crow-Armstrong is quickly becoming a fan favorite, as the Cubs faithful are taking to his aggressive style of play. He was asked what it’s like to hear his name chanted when he comes to the plate after producing in previous at-bats.

“I’ve tried to tune that out,” he said with a laugh. “I was actually thinking about it yesterday and I was like, I got to be 0-for-20 when they’ve chanted my name. But they continue to chant and they get behind every one of us and it’s the coolest thing.”

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Dodgers’ Snell to pause throwing after discomfort

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Dodgers' Snell to pause throwing after discomfort

CHICAGO — Los Angeles Dodgers starter Blake Snell will back off his throwing program as he continues to recover from left shoulder inflammation, according to manager Dave Roberts.

“As he was playing catch, he just didn’t feel great,” Roberts said Wednesday afternoon before the Dodgers played the Chicago Cubs. “Right now, we’re going to slow play the throwing. Will probably get it looked at again when we get back home.”

Snell, 32, has been on the injured list since early April after making just two starts for the Dodgers. He signed a five-year, $182 million contract this past offseason.

Snell, who was set to throw a bullpen session Wednesday, felt discomfort in the shoulder while playing catch Tuesday. Roberts was asked how concerning the latest setback was.

“I wouldn’t say concerning because part of the messaging from us to Blake is, it’s about later on in the season and if there’s any type of discomfort, let’s not try to fight through it,” Roberts responded.

Snell is one of several Dodgers pitchers on the mend, including left-hander Clayton Kershaw, who pitched three innings in a minor league start Tuesday, his second rehab outing this spring.

“Velocity was good,” Roberts said. “Got into the fourth inning. He’ll make a start next week. Really positive stuff.”

The Dodgers also received positive news about right-hander Tyler Glasnow after he left his last start with leg cramps. His latest bullpen session went well, according to Roberts.

Meanwhile, Shohei Ohtani is throwing again after missing time on the paternity list. He’ll have another bullpen session Saturday as he recovers from elbow surgery, though the team still doesn’t have a timetable for his return to major league action.

The team was also without catcher Will Smith on Wednesday after he injured his wrist on a play at the plate in Tuesday’s loss to the Cubs.

“As he made the tag, his [left] wrist turned in and so there’s some residual soreness,” Roberts said.

Smith could get imaging done when the team returns to Los Angeles, but Roberts wasn’t overly concerned about the injury.

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Rangers’ Seager goes on IL with hamstring strain

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Rangers' Seager goes on IL with hamstring strain

WEST SACRAMENTO, Calif. — The Texas Rangers placed shortstop Corey Seager on the 10-day injured list Wednesday because of a strained right hamstring.

Seager, 30, pulled up while running to first base in the sixth inning Tuesday at the Athletics and left the game. He started 21 of Texas’ first 23 games this season and is hitting .286 with four home runs and six RBIs. Seager has a team-high 17 hits since April 8.

The Rangers also called up infielder Nick Ahmed and designated left-handed pitcher Walter Pennington for assignment. Ahmed, 35, is seeking to appear in a major league game for the 12th consecutive season. He has played for Arizona (2014-23), San Francisco (2024), the Los Angeles Dodgers (2024) and San Diego (2024).

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