Amazon, which controls 40% of all e-commerce in the United States, according to the Federal Trade Commission, used an algorithm to prompt competitors to raise their prices.

Amazon boosted its profits through this secret computer algorithm, according to newly unredacted passages in the FTC’s antitrust lawsuit against the company, The Wall Street Journal reports.

If competitors didn’t raise their prices to Amazon’s level, the FTC claims, the algorithm would reduce prices on Amazon products. In cases where competitors had reduced prices for a special promotion, according to the FTC, the algorithm would match their prices by lowering the costs on Amazon products.

Amazon would also “punish” competitors with lower prices by downgrading their listings to make to difficult for shoppers to find them, the lawsuit says.

The e-commerce giant made more than $1 billion in revenue via the software, codenamed “Project Nessie,” according to a person familiar with the matter.

An Amazon spokesperson said Project Nessie was only used to increase prices on Amazon goods during discount battles, telling The Wall Street Journal: “The FTC’s allegations grossly mischaracterize this tool. Project Nessie was a project with a simple purpose—to try and stop our price matching from resulting in unusual outcomes where prices became so low that they were unsustainable.”

The FTC declined to comment on the algorithm, which Amazon has since stopped using, but Commission spokesman Douglas Farrar said: “We once again 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.”

The government further says that Amazon pockets nearly half of the dollar amount of third-party sales on its platform. This claim is backed by a report by research group Local Self-Reliance, which found that between 2014 and 2023, Amazon’s share of third-party sales—including fees charged to retailers to sell, advertise and fulfill orders on its platform—rose from 19% to 45%.

“Amazon’s one-two punch of seller punishments and high seller fees often forces sellers to use their inflated Amazon prices as a price floor everywhere else,” the complaint states.

An Amazon merchant of kitchen products, Brandon Fuhrmann, says of the need to pay advertising fees on the Amazon platform, “It’s become pay to play.”

Another third-party seller on Amazon, Jess Nepstad, who markets outdoor coffee products, says he has reduced his reliance on Amazon to 40% of his sales.

“It’s a love-hate relationship,” Nepstad says. “They can turn the switch on you in a blink of an eye, and you can be out of business.”