427
Amazon reportedly used a secret algorithm to jack up prices
(www.theverge.com)
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
this post was submitted on 03 Oct 2023
427 points (97.1% liked)
A Boring Dystopia
9506 readers
538 users here now
Pictures, Videos, Articles showing just how boring it is to live in a dystopic society, or with signs of a dystopic society.
Rules (Subject to Change)
--Be a Decent Human Being
--Posting news articles: include the source name and exact title from article in your post title
--Posts must have something to do with the topic
--Zero tolerance for Racism/Sexism/Ableism/etc.
--No NSFW content
--Abide by the rules of lemmy.world
founded 1 year ago
MODERATORS
Isn’t this how retail pricing always works?
That basically sounds like automated price fixing
Price fixing is when sellers conspire to increase prices beyond what normal competition would support. The fact that the algorithm reduces the price below competitors’ when it detects they are not following a corresponding increase means it’s not price fixing.
Maybe it's the overall price of something else that's not shown
Tech Giants Settle Wage-Fixing Lawsuit
That did happen.
What's perceived as competitors can be allies to accomplish common goals. Though they settled the lawsuit, it's not like this got put out of practice. They refined it
This is the defining characteristic of price / wage fixing - out-of-band collusion of price setters to discourage competition. There isn’t even an allegation that this is happening here.
That's why it's so brilliant. If you can develop an in-band system to coordinate arbitrary price increases between firms then you have plausible deniability. Who needs price fixing if you can just temporarily increase price, see who's price matching algorithms follows, and act accordingly using an algorithm that acts so fast that consumers are none the wiser when the "negotiation" to increase price fails.
The fact that the impetus for the price increase is nothing more than to test if other firms will raise their prices to match an increase and has nothing to do with supply or demand of the product makes it transparent that this strategy achieves the effect of price fixing without the smoking gun of explicit negotiation and plausible deniability that they are simply engaging in "price leadership".