The ecommerce giant, Amazon, has asked a federal court to dismiss a US government antitrust lawsuit that accuses the company of using illegal strategies to boost profits at its platform, including an algorithm that allegedly pushed up prices by more than USD 1 billion.
In September, the US Federal Trade Commission (FTC) filed a lawsuit, which according to Amazon was confused with “common retail practices” with anti-competitive conduct. It said the alleged harm to the consumers wasn’t identified.
“Amazon promptly matches rivals’ discounts, features competitively priced deals rather than overpriced ones, and ensures best-in-class delivery for its Prime subscribers,” the company said in asking for the lawsuit to be “dismissed in its entirety.”
Amazon, which has 1 billion items in its online superstore, and used a “secret algorithm” named Project Nessie to identify products for which it can raise prices without losing customers and the platform used it to extract over USD 1 billion from the Americans, according to FTC’s lawsuit.
In its filing, Amazon clarified that the alleged “secret algorithm” Project Nessie was discontinued in 2019 and that the brand matches other companies’ lowest prices.
The FTC was also critical of Amazon’s decision to require sellers under the company’s Prime feature to use its logistics and delivery services even though many preferred to use a cheaper service or one that would also serve customers on other platforms.
Amazon defended its requirement for sellers to use its logistics, stating it was voluntary and refuted the FTC’s criticism of increased fulfillment service fees, citing competition with other online superstores and specialized retailers.
The company also argued that it competed with other online superstores like Walmart and Target and a range of stores with specialised markets such as Best Buy, Home Depot, Kroger, Costco, Staples, Walgreens, Nike and Apple.
