Competitor price monitoring is everywhere. Here is what the big retailers do

If you have ever checked a competitor's website to see what they charge, you did by hand what much of retail now does by machine. Watching rivals' prices is not a fringe tactic. It is one of the most ordinary inputs to pricing, and the largest sellers have been doing it at scale for years.

What the research says

Academic work on online retail describes the same pattern: retailers keep a close eye on competitors' prices and use them as an input when setting their own, largely because comparison shopping makes prices so visible. In one University of Michigan field experiment with a retail partner, a pricing algorithm that responded to competitors' prices raised daily revenue in the test category by 11 percent. That is a single study at a single retailer, so treat it as an illustration, not a promise.

Amazon and "Project Nessie"

The most famous example is also the most contested. In its antitrust case against Amazon, the US Federal Trade Commission alleges that Amazon built a pricing tool, internally called Project Nessie, to find products where rival retailers would reliably follow an Amazon price increase. According to the complaint, Amazon would then raise those prices and hold them, expecting competitors to follow. The unsealed filing put the alleged gain at more than $1 billion between 2016 and 2018 (GeekWire, PYMNTS).

Amazon disputes this. A spokesperson has said the tool was grossly mischaracterized, that it was stopped years ago, and that it was mainly used to keep Amazon's price matching from driving prices to unsustainable lows. In October 2024 a federal judge refused to dismiss the federal antitrust claims, ruling that the enforcers had plausibly alleged a violation (BCLP summary).

These are allegations in a case that is not over. What they show for this article is narrower: according to the FTC, the company with the most data in retail considered competitor price signals valuable enough to build a dedicated system around them.

Price matching is a public promise to watch

Plenty of stores tell customers outright that they track the competition. Best Buy's price-match guarantee promises to match named online and local competitors, while Walmart's has narrowed over the years and Amazon does not match prices at all, according to consumer-finance summaries such as Money Crashers. Policies change often, so check each retailer's current terms before relying on any detail. The point is that a promise to match is a promise to know what the other store charges.

The tools got cheaper

Repricing software ranges from simple rules, such as beating the lowest competitor by a cent, to systems that weigh margin, stock and demand and update prices every few minutes. Vendors market these capabilities heavily, so adoption figures from their own blogs deserve skepticism. But the direction is clear: what used to need a data team now runs as a subscription, and a store with a few hundred products can have it.

What this means for a smaller store

• Assume larger competitors can see you. If a bigger retailer sells the same products as you, there is a fair chance a person or a tool there is looking at your prices.
• Start with the products you share. You do not need to watch everything. Begin with the items that overlap with one to three competitors.
• Decide your rules before you look. Which products you always match, which you never discount, and your margin floor. Data without rules produces anxiety, not decisions.
• Use public prices only. Everything above is about information any shopper can see.