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FTC: Amazon Used An Algorithm To Essentially Raise Prices On Other Sites, The FTC Says

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According to newly unredacted portions of the FTC’s antitrust lawsuit against Amazon, the company used a secret algorithm that helped the company raise prices on other online sites and “destroyed” some internal communications while the agency was investigating the company.

According to the new extracts released on Thursday, Amazon officials purposefully destroyed correspondence by utilizing a feature on the popular app Signal that causes communications to vanish. The FTC said that by doing so, Amazon “destroyed more than two years’ worth of communications” from June 2019 to “at least early 2022,” despite directives to the contrary from the FTC.

Amazon spokesperson Tim Doyle said in a prepared statement that the FTC’s claim was “baseless and irresponsible.”

“Amazon voluntarily disclosed employee Signal use to the FTC, painstakingly collected Signal conversations from its employees’ phones, and allowed agency staff to inspect those conversations even when they had nothing to do with the FTC’s investigation,” Doyle stated in a press release.

In September, the FTC and 17 states sued Amazon, alleging that the corporation was abusing its market position to inflate prices on and off its platform, overcharge vendors, and hinder competition. Amazon has been accused of breaking federal and state antitrust laws, but the corporation has defended its business practices vigorously.

The antitrust prosecution is the government’s most forceful endeavor to curb Seattle-based Amazon’s market clout, and it comes at a time when the FTC has been taking big swings against internet corporations.

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Amazon Used An Algorithm To Essentially Raise Prices On Other Sites, The FTC Says

The lawsuit’s unredacted extracts released on Thursday also gave new information on a much-discussed algorithm, originally published by The Wall Street Journal and former Vox reporter Jason Del Ray.

According to the FTC’s allegations, Amazon has utilized the program, nicknamed “Project Nessie,” to identify products that will allow them to make more money. The corporation utilized it to forecast where it may boost prices and have other shopping sites follow suit. According to the agency, Amazon activated the algorithm to raise prices on select products, and when other sites followed suit, it maintained the higher pricing in place. According to the FTC, Amazon’s usage of Nessie has resulted in more than $1 billion in excess profits.

“Aware of the public fallout it risks, Amazon has turned Project Nessie off during periods of heightened outside scrutiny and then back on when it thinks that no one is watching,” according to the complaint.

According to the agency, Amazon launched Project Nessie in 2014 and turned it on and off at least eight times between 2015 and 2019. According to the complaint, Amazon utilized the algorithm to establish pricing for items viewed more than 400 million times by shoppers in 2018.

ftc

Amazon Used An Algorithm To Essentially Raise Prices On Other Sites, The FTC Says

Though Amazon maintains the algorithm is “currently paused,” regulators say the corporation has considered launching studies in 2020 and 2021 to improve the effectiveness of Project Nessie. Doyle, an Amazon spokeswoman, described Nessie as an “old” pricing algorithm that the agency is “grossly” mischaracterizing.

“Nessie was used to try to stop our price matching from resulting in unusual outcomes where prices became so low that they were unsustainable,” he told reporters. “The project ran for a few years on a subset of products, but didn’t work as intended, so we scrapped it several years ago.”

The unredacted portions of the case, among other things, give new information on Amazon’s advertising operation.

According to the agency, then-CEO Jeff Bezos told executives to accept more trash ads — internally referred to as “defects” — because the company could generate more money through expanded advertising even though their existence annoyed consumers. In response, Doyle stated that Amazon “works hard to make it fast and easy” for customers to find items and other options “by providing a mix of organic and sponsored search results” based on characteristics such as relevance, reviews, availability, price, and delivery speed.

ftc

Amazon Used An Algorithm To Essentially Raise Prices On Other Sites, The FTC Says

Another unredacted section of the case revealed more information on the government’s claims that Amazon effectively forces merchants to utilize its logistics service, Fulfilment by Amazon, or FBA. One example is Amazon’s Seller Fulfilled Prime program, which allowed third-party sellers to show a Prime logo on their products without using FBA. Sellers seek the Prime badge because it denotes quick shipping, which can lead to more sales.

According to the agency, the corporation turned against the program in early 2019 after discovering rival fulfillment suppliers were advertising their services to vendors. Amazon discontinued membership in the program a few years ago, claiming that it was not providing the same high-quality experience that Prime customers expected. However, the agency stated that in 2018, vendors registered in the program satisfied Amazon’s “delivery estimate” criterion more than 95% of the time.

The lawsuit also included an email from an Amazon official stating that he was “losing (his) mind” after finding that UPS was promoting that it could fulfill Prime-eligible orders. According to the FTC, two “high-level” Amazon executives agreed in the same email chain that the business should consider shutting down Seller Fulfilled Prime in the United States.

NetChoice, an Amazon-backed industry association, said Thursday that the FTC was deceptive and that vendors, not Amazon, established the shipping estimates mentioned in the complaint. According to Doyle of Amazon, in 2018, sellers using the program were “promising deliveries within two days less than 16% of the time—far worse than the performance of sellers using Fulfilment by Amazon.” A few months ago, the corporation reopened enrollment in the program.

SOURCE – (AP)

Kiara Grace is a staff writer at VORNews, a reputable online publication. Her writing focuses on technology trends, particularly in the realm of consumer electronics and software. With a keen eye for detail and a knack for breaking down complex topics, Kiara delivers insightful analyses that resonate with tech enthusiasts and casual readers alike. Her articles strike a balance between in-depth coverage and accessibility, making them a go-to resource for anyone seeking to stay informed about the latest innovations shaping our digital world.

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Boeing CEO Defends His Safety Record, Spars With Senators And Apologizes To Crash Victims’ Relatives

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Boeing | AP News Image

During a bruising Senate hearing on Tuesday, Boeing CEO David Calhoun defended the company’s safety record while members accused him of prioritizing profits over safety, failing to protect whistleblowers, and even receiving excessive pay.

Relatives of victims killed in two Boeing 737 Max plane tragedies were in the room, some holding photos of their loved ones to remind the CEO of the dangers. Calhoun began his speech by standing, turning to face the families, and apologizing “for the grief that we have caused,” pledging to prioritize safety.

Calhoun’s testimony before Congress was the first by a high-ranking Boeing official since a panel blew off a 737 Max on an Alaska Airlines flight in January. The event did not result in significant injuries but aroused new concerns about the company’s best-selling commercial aircraft.

The tone of the hearing before the Senate investigations subcommittee was established hours earlier when the panel released a 204-page report containing additional charges from a whistleblower who expressed concern that defective parts were being used in 737s. The whistleblower is the latest in a long line of current and former Boeing employees who have expressed concerns about the company’s manufacturing practices, which federal regulators are investigating.

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Boeing | AP News Image

Boeing CEO Defends His Safety Record, Spars With Senators And Apologizes To Crash Victims’ Relatives

“This hearing is a moment of reckoning,” subcommittee chairman Richard Blumenthal, D-Conn., declared. “It’s about a company, a once iconic company, that somehow lost its way.”

Sen. Josh Hawley, R-Mo., blamed Calhoun, claiming that the man who became CEO in January 2020 was too focused on the bottom line.

“You are cutting corners, you are eliminating safety procedures, you are sticking it to your employees, you are cutting back jobs because you are trying to squeeze very piece of profit you can out of this company,” Hawley stated in a higher tone. “You are strip-mining Boeing.”

Hawley repeatedly cited Calhoun’s $32.8 million salary from last year and questioned why the CEO had not resigned.

“Senator, I’m going to see this through. I’m proud to have taken this position. I’m pleased of our safety record, and I’m proud of our Boeing employees,” said Calhoun, who has announced his resignation by the end of the year.

Hawley interrupted. “You’re proud of the safety record?” he asked, perplexed.

“I am proud of every action we have taken,” Calhoun said.

Senators grilled Calhoun on allegations that Boeing managers penalized employees who raised safety concerns. They asked the CEO if he had ever spoken with any whistleblowers. He said he hadn’t but agreed it was a nice idea.

The latest whistleblower, Sam Mohawk, a quality assurance investigator at Boeing’s 737 assembly facility outside Seattle, told the subcommittee that “nonconforming” parts — those that could be defective or not properly documented — could end up in 737 Max aircraft.

Mohawk alleged that Boeing suppressed evidence after the Federal Aviation Administration informed the business that it planned to inspect the factory in June 2023.

“Once Boeing received such a notice, it ordered the majority of the (nonconforming) parts that were being stored outside to be moved to another location,” Mohawk stated in the report. “Approximately 80% of the parts were moved to avoid the watchful eyes of the FAA inspectors.”

Mohawk stated that the parts, which included rudders, wing flaps, and other components necessary for aircraft control, were later returned or lost.

A Boeing spokeswoman stated that the firm received the subcommittee report late Monday night and is evaluating the claims.

The FAA stated that it would “thoroughly investigate” the allegations. A spokeswoman stated that the government has received more reports of safety issues from Boeing personnel since the January 5 rupture on the Alaska Airlines Max.

The 737 Max has a troublesome history. After Max jets crashed in Indonesia in 2018 and Ethiopia in 2019, killing 346 people each, the FAA and other agencies grounded the aircraft for more than a year and a half. The Justice Department is considering prosecuting Boeing for breaking the terms of a 2021 settlement over charges that the corporation misled regulators who authorized the plane.

Mohawk told the Senate hearing that the quantity of problematic parts has increased dramatically since production of the Max resumed following the incidents. He claimed that the increase prompted superiors to instruct him and other employees to “cancel” documents indicating that the parts were unsuitable for plane installation.

Following the mid-air burst of a plug covering an emergency exit on an Alaska Airlines plane in January, the FAA temporarily grounded certain Max flights. The agency and the National Transportation Safety Board began separate investigations into Boeing, which are still ongoing.

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Boeing | AP News Image

Boeing CEO Defends His Safety Record, Spars With Senators And Apologizes To Crash Victims’ Relatives

Calhoun stated that Boeing has responded to the Alaska tragedy by reducing production, encouraging employees to raise safety problems, shutting down assembly lines daily to allow workers to discuss safety, and appointing a former Navy admiral to conduct a quality review. Late last month, Boeing delivered an improvement plan requested by the FAA.

Calhoun defended the company’s safety culture, admitting it “is far from perfect.”

The drumbeat of bad news for Boeing has continued throughout the last week. The FAA said it was looking into how falsely documented titanium parts ended up in Boeing’s supply chain; the company revealed that fasteners were incorrectly installed on the fuselages of some jets, and federal officials examined “substantial” damage to a Southwest Airlines 737 Max following an unusual mid-flight control issue.

During the hearing, Howard McKenzie, Boeing’s top engineer, stated that the problem with the Southwest airliner, which he did not describe in detail, was limited to that plane.

Blumenthal first requested Calhoun’s appearance before the Senate subcommittee when another whistleblower, a Boeing quality engineer, claimed that manufacturing flaws were posing safety hazards on two of Boeing’s largest jets, the 787 Dreamliner and the 777. He stated that the corporation needed to explain why the public should believe in Boeing’s work.

Boeing denied the whistleblower’s assertions, claiming that comprehensive testing and inspections revealed none of the issues the engineer had foreseen.

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Boeing | AP News Image

Boeing CEO Defends His Safety Record, Spars With Senators And Apologizes To Crash Victims’ Relatives

Last month, the Justice Department found that Boeing breached a 2021 settlement that protected the firm from fraud charges for allegedly deceiving regulators who approved the 737 Max. According to a senior department official, Boeing failed to implement steps to detect and prevent future infractions of anti-fraud rules.

Prosecutors have until July 7 to decide what they will do next. Blumenthal claimed that there is “mounting evidence” that the firm should be penalized.

Families of the victims of the Max crashes have frequently urged the Justice Department to punish the business and its leaders. They want a federal judge in Texas to overturn the 2021 deferred-prosecution agreement or DPA — effectively a plea deal — that allowed Boeing to escape prosecution for fraud in connection with the Max.

Catherine Berthet, whose daughter Camille perished in the second disaster, stated outside the Capitol on Tuesday that despite having three years to improve their safety process, they failed to do so. “Now they have to be made accountable.”

SOURCE – (AP)

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Apple Kills Off Its Buy Now, Pay Later Service Service Barely A Year After Launch

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Apple | AP news Image

NEW YORK — Apple is abandoning its purchase now, pay later service, known as Apple Pay Later, less than a year after its first debut in the United States, and will rely on industry leaders such as Affirm and Klarna.

It’s an admission from a firm recognized for creating successful products that are starting a financial services business from scratch, as Apple has done for several years, is challenging and competitive.

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Apple | Investing Image

Apple Kills Off Its Buy Now, Pay Later Service Service Barely A Year After Launch

Apple Pay Later, introduced with fanfare in March 2023, allows iPhone consumers to split purchases of up to $1,000 into four equal installments with no fees or interest. The program was Apple’s response to the growing global popularity of purchase now, pay later services, which were viewed as a significant threat to companies such as Klarna, Affirm, and others.

However, Apple Pay Later was only available where Apple Pay was accepted, whereas the other buy now, pay later providers had strong integration with millions of merchant websites.

In recognition of how popular purchase now and pay later services have grown, Apple announced at its developer conference this month that it will begin allowing banks to provide buy now and pay later plans to their clients via Apple Pay and Apple Wallet. Affirm would be integrated directly into Apple Wallet, allowing Apple customers to open an Affirm account instantly.

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Apple | Linked In

Apple Kills Off Its Buy Now, Pay Later Service Service Barely A Year After Launch

“With the introduction of this new global installment loan offering, we will no longer offer Apple Pay Later in the U.S.,” Apple stated late Monday. “Our focus continues to be on providing our users with access to easy, secure and private payment options with Apple Pay, and this solution will enable us to bring flexible payments to more users, in more places across the globe, in collaboration with Apple Pay enabled banks and lenders.”

Despite unveiling plans to integrate Affirm directly into Apple Wallet earlier this month, Apple executives stated that Apple Pay Later was still in the works.

Apple Pay Later was unique since Apple needed to establish its bank to provide loans. The Apple Card is issued by Goldman Sachs, which means that Goldman selects who is accepted and what spending limits each user has.

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Apple | Brand News Image

Apple Kills Off Its Buy Now, Pay Later Service Service Barely A Year After Launch

Apple will no longer provide new Apple Pay Later loans, but customers who already have them will be able to manage them using Apple Pay.

SOURCE – (AP)

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Boeing CEO Is Appearing Before A Senate Panel As A New Whistleblower Emerges

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Boeing | AP News Image

U.S. legislators are set to question Boeing’s CEO on Tuesday about the company’s newest plan to address manufacturing issues, and relatives of those killed in two Boeing 737 Max airliner tragedies will be in the room to watch.

CEO David Calhoun is slated to testify before the Senate investigations subcommittee, chaired by Boeing critic Sen. Richard Blumenthal, D-Conn.

Hours before Calhoun was scheduled to appear, the Senate panel issued a 204-page report including additional allegations from a whistleblower who is concerned that “nonconforming” parts — those that may be defective or not properly recorded — are being installed in 737 Max jets.

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Boeing | Fox Image

Boeing CEO Is Appearing Before A Senate Panel As A New Whistleblower Emerges

Sam Mohawk, a quality assurance investigator at Boeing’s 737 assembly factory outside Seattle, claims the corporation concealed proof of the condition after the Federal Aviation Administration told it a year ago that it would inspect the facility.

“Once Boeing received such a notice, it ordered the majority of the (nonconfirming) parts that were being stored outside to be moved to another location to intentionally hide improperly stored parts from the FAA,” Mohawk stated in the study. “Approximately 80% of the parts were moved to avoid the watchful eyes of the FAA inspectors.”

Mohawk stated the parts were later returned or lost. They included rudders, wing flaps, and tail fins, all necessary for plane control.

The panel stated that records and whistleblower statements “paint a troubling picture of a company that prioritises manufacturing speed and cost savings over ensuring aircraft quality and safety.”

The hearing will be Calhoun’s first appearance before Congress or any other high-ranking Boeing official since a panel blew out a 737 Max during an Alaska Airlines flight in January. The event did not result in significant injuries but aroused new concerns about the company’s best-selling commercial aircraft.

The National Transportation Safety Board and the Federal Aviation Administration conduct separate investigations.

“From the start, we accepted responsibility and worked transparently with the NTSB and the FAA,” Calhoun stated in prepared statements for the hearing. He defended the company’s safety culture.

“Our culture is far from perfect, but we are taking action and making progress,” Calhoun said during his prepared remarks. “We are taking comprehensive action today to strengthen safety and quality.”

Blumenthal heard this previously when Boeing dealt with fatal Max crashes in Indonesia in 2018 and Ethiopia in 2019.

“Boeing pledged to change its safety processes and culture five years ago. “That promise proved empty, and the American people deserve an explanation,” Blumenthal stated while announcing the hearing. He described Calhoun’s statement as a critical step for Boeing to regain public trust.

Boeing

Boeing | NBC Image

Boeing CEO Is Appearing Before A Senate Panel As A New Whistleblower Emerges

Calhoun’s presence was also scheduled as the Justice Department considered whether to charge Boeing for violating the settlement terms reached following the tragic crashes.

The firm says it received the message. Boeing says it has reduced production, encouraged employees to raise safety issues, shut down assembly lines daily to allow workers to discuss safety, and appointed a former Navy admiral to conduct a quality review. Late last month, it delivered an improvement plan requested by the FAA.

The barrage of bad news for Boeing continues, however.

Last week, the FAA announced an investigation into how falsely documented titanium parts entered Boeing’s supply chain, and federal inspectors investigated “substantial” damage to a Southwest Airlines 737 Max following an unexpected mid-flight control issue.

Boeing said that it hasn’t received a single request for a new Max—its previous best-selling airliner—in two months.

Blumenthal first requested Calhoun’s appearance before the Senate subcommittee when a Boeing quality engineer whistleblower claimed that production flaws were posing safety hazards on two of Boeing’s largest jets, the 787 Dreamliner and the 777. He stated that the corporation needed to explain why the public should believe in Boeing’s work.

Boeing denied the whistleblower’s assertions, claiming that comprehensive testing and inspections revealed none of the issues the engineer had foreseen.

boeing

Boeing | CNBC Image

Boeing CEO Is Appearing Before A Senate Panel As A New Whistleblower Emerges

Calhoun announced in late March that he would retire at the end of the year. The leader of the company’s commercial aeroplanes segment quit on the same day.

Families of those killed in the Boeing Max disaster in Ethiopia intend to attend Tuesday’s hearing on Capitol Hill. They have frequently asked the Justice Department to pursue Boeing.

Zipporah Kuria, whose father was killed in the collision, stated, “We will not rest until justice is served.” She urged the US government to “hold Boeing and its corporate executives criminally responsible for the deaths of 346 people.”

Last month, the Justice Department found that Boeing breached a 2021 settlement that protected the firm from fraud charges for allegedly deceiving regulators who approved the 737 Max. According to a senior department official, Boeing failed to implement steps to detect and prevent future infractions of anti-fraud rules.

Prosecutors have until July 7 to decide what they will do next.

SOURCE – (AP)

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