Amazon and Walmart's AI shopping assistants are often capable of detecting when 'Made in USA' product labels are false — but the two retail giants are choosing not to use that capability to crack down on misleading listings, according to a new study from Columbia Law School's Center for Law and the Economy.

The study, the first published by the center led by former U.S. Federal Trade Commission chair Lina Khan, found that Amazon's Alexa for Shopping and Walmart's Sparky assistants can identify mismatches between explicit 'made in USA' claims and contradictory information in product listings. When researchers asked why the companies do not do more, the chatbots offered business justifications: Walmart's Sparky replied that the FTC typically enforces 'Made in USA' rules against manufacturers, not retailers, calling it 'a business calculation, not a legal justification.' Amazon's Alexa went further, stating that 'the harm to U.S.-made brands is real and documented, but until that harm creates a financial, regulatory, or reputational cost for Amazon specifically, it remains easier to do nothing.'

U.S. rules require products advertised as 'Made in USA' to be 'all or virtually all' made in the country, and the FTC urged both retailers last year to police third-party sellers' claims. Amazon said it displays country-of-origin information and takes action against sellers violating its policies; Walmart did not immediately comment.

'Even as AI tools continue to grow in sophistication and capability, business incentives will shape how these advancements get deployed,' Khan said. 'Policymakers and enforcers have a vital role to play to ensure the public doesn't get the short end of the stick.' The findings revive questions about the mixed incentives behind AI shopping assistants, which retailers increasingly see as tools to boost spending.

Sources