Amazon Buy Box pricing algorithm 'hides' best deal from customers
Amazon's Buy Box algorithms misled customers and caused them to spend much more than they should, according to a ProPublica investigation. By look ing at 250 items on Amazon that are purchased at a high frequency, ProPublica discovered that almost three-quarters of the time Amazon would place its own products or those from companies that pay Amazon to fulfill orders into the Buy Box, even though they were not always the cheapest. The finding suggested that Amazon's algorithm for determining which offer appeared in the Buy Box did not always show customers the best available deal. Instead, the algorithm was thought to be hiding lower-priced options from immediate view. ProPublica also discovered that Amazon had been deliberately hiding delivery costs for its own products, and those companies that pay Amazon for its fulfilment services, earning Amazon-linked products higher rankings in more than 80 percent of cases and resulting in customers over-paying for products and putting other companies using Amazon to sell products at a competitive disadvantage. The claim raised questions about Amazon's ethics, pricing transparency and whether its practices are in the best interest of consumers, as the company claimed. It was also accused of disadvantaging other merchants on its platform and abusing its dominant e-commerce position by entering new business lines - such as cosmetics - and "consistently winning the buy box." System 🤖 Amazon Buy Box Operator: Amazon Developer: Amazon Country: USA Sector: Retail Purpose: Determine seller Technology: Pri cing algorithm; Machine learning Issue: Business model; Competition/price fixing; Ethics/values; Tr ansparency Investigations, assessments, audits 🧐 ProPublica (2016). Amazon Says It Puts Customers First. But Its Pricing Algorithm Doesn’t
- Date it happened
- 2016-09-01
- Organisation involved
- Amazon
- Product, system or model
- Buy Box
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