Sen. Warren Presses Amazon on Algorithmic Pricing for Schools

Democrat Sen. Elizabeth Warren of Massachusetts is asking Amazon CEO Andy Jazzy to provide details on its algorithmic pricing and contracting practices for the company's procurement platform after an advocacy group said some schools and local governments paid more for office supplies compared to others in nearby locations, according to a letter seen by Reuters.

"Instead of offering fixed prices for all buyers, which are typical in the procurement space, Amazon Business subjects buyers to algorithm-driven dynamic pricing that forces school districts and local governments to pay ever-changing, often inflated costs for essential goods," Warren said in the letter.

States including California and New York, along with the U.S. Federal Trade Commission, have raised concerns about the collection and use of personal data to determine prices

Advocacy group Institute for Local Self-Reliance in December released a report saying algorithmic pricing by Amazon Business lets the company covertly raise prices.

One city paid three times as much for a pack of Sharpies as another nearby school district, according to the ILSR report.

Warren asked Amazon a dozen questions about how it determines prices for local governments and school districts, and its use of personal consumer data to set prices.

Warren in February sent a letter to Amazon on behalf of the Committee on Banking, Housing, and Urban Affairs requesting information about tariff-induced price increases on its e-commerce marketplace and if the company plans to decrease prices if it receives refunds for tariff payments recently deemed illegal by the Supreme Court.