Amazon made US$1b via secret price-raising algorithm: US FTC

The news: The US Federal Trade Commission has alleged Amazon.com used a series of illegal strategies to boost profits including a secret algorithm that raised prices to US households.

The numbers: The FTC has detailed in a court filing that the online retail giant gained more than USD1 billion ($1.55 billion) through a secret algorithm internally codenamed 'Project Nessie' that identified and predicted specific products for which other online stores would follow Amazon's price increases.

The context: The FTC alleged Amazon would continue to sell the product at an inflated price after outside retailers began matching or increasing their own prices, resulting in excess profit. The algorithm was paused during Prime Day sales events and the holiday shopping season when there was more media and customer attention, but it ran more widely later to make up for the pause.

The filing is part of an antitrust lawsuit by the FTC and 17 other states against Amazon.com and comes after years of complaints that the company and other tech giants abused their dominance of search, social media and online retailing to become gatekeepers on the most profitable aspects of the internet.