New details have emerged about Amazon.com Inc.’s “Project Nessie” algorithm, which is a major focus of a lawsuit the Federal Trade Commission recently brought against the company.

The Wall Street Journal reported today that Amazon used Project Nessie to set product prices on its e-commerce marketplace. The publication attributed the information to former employees of the online retail and cloud computing giant, as well as people familiar with the FTC’s lawsuit. Project Nessie is believed to have generated more than $1 billion in revenue for Amazon.

Last week, the FTC and 17 state attorneys general sued the company for allegedly using anticompetitive tactics to boost its e-commerce business. Amazon’s product pricing strategy is a core focus of the lawsuit. The FTC charges that “if Amazon discovers that a seller is offering lower-priced goods elsewhere, Amazon can bury discounting sellers so far down in Amazon’s search results that they become effectively invisible.”

The lawsuit contains more than three pages discussing Project Nessie. Those pages were almost fully redacted before the complaint’s publication last week. In a sentence that preceded one of the redacted sections, the FTC wrote that “Amazon has implemented an algorithm for the express purpose of deterring other online stores from offering lower prices.”

The Journal today described Project Nessie as an algorithm designed to increase and decrease product prices on Amazon. According to the report, the company used the algorithm to raise prices and see if competitors would follow suit. If rivals opted not to do so, Project Nessie would reportedly lower the price of the affected products back to their original level.

It’s believed that Amazon also used the algorithm to match discounts offered by rivals. In some cases, former employees told the Journal, the company’s efforts to match a rival’s discount prompted several other retailers to lower their own prices. There were reportedly situations where Amazon and those other retailers “would remain locked at the low price” even after the original discount that set off the price reductions expired.

Today’s report cited a person familiar with the matter as saying that Amazon generated more than $1 billion in revenue from Project Nessie. The company is said to have stopped using the algorithm in 2019.

Amazon last week issued a lengthy statement responding to the FTC’s lawsuit. The statement included several paragraphs in which the company discussed its e-commerce business’ pricing strategy. 

“The FTC’s case alleges that our practice of only highlighting competitively priced offers and our practice of matching low prices offered by other retailers somehow lead to higher prices,” David Zapolsky, Amazon’s senior vice president of global public policy and general counsel, wrote in the statement. “The FTC has it backwards and if they were successful in this lawsuit, the result would be anticompetitive and anti-consumer because we’d have to stop many of the things we do to offer and highlight low prices.”

In a statement addressing the FTC’s allegations about Project Nessie, Amazon spokesperson Tim Doyle said that “the FTC’s allegations grossly mischaracterize this tool. Project Nessie was a project with a simple purpose—to try to stop our price matching from resulting in unusual outcomes where prices became so low that they were unsustainable. 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.”

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