By Rajwa Quasim
A new study found that Amazon’s and Walmart’s AI shopping assistants can identify false “Made in USA” claims on products, but the companies are not using that capability to warn shoppers about misleading labels.
The report comes from a thinktank led by Lina Khan, the former chair of the Federal Trade Commission (FTC), and was first published by Columbia Law School’s Center for Law and the Economy. According to the study, Amazon’s Alexa and Walmart’s Sparky can identify contradictions within the same product listing. For instance, a “Made in USA” badge appearing alongside mentions of imported components or overseas shipping details.
When researchers pointed why the AI assistants don’t flag these inconsistencies to shoppers, the chatbots gave a tactful response rather than a logical one. Walmart’s Sparky said the FTC typically pursues manufacturers rather than retailers for false labeling, meanwhile Amazon’s Alexa said, “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.”
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Under FTC rules, a product can be marketed as “Made in USA” only if it is “all or virtually all” manufactured in the United States. The FTC has already taken action on the issue. In July 2025, the agency sent warning letters to Amazon and Walmart regarding third-party sellers that appeared to be making deceptive “Made in USA” claims on their marketplaces. FTC Chairman Andrew Ferguson stressed that the consumers deserve confidence that USA labeled products genuinely support American workers.
“‘Made in the USA’ is not just a slogan – it’s a sign that a product connects us to the workers and businesses that make America great,” Ferguson said. “Consumers want to have confidence that when they buy something labelled ‘Made in the USA’ they are actually supporting American workers and the American economy. Companies that falsely claim their products are ‘Made in the USA’ can expect to hear from the FTC.”
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Back in 2025, FTC had sent warning letters to four companies, flagpole retailer American Liberty, footwear maker Oak Street Manufacturing LLC, football equipment company Pro Sports Group LLC, and personal care products manufacturer USA Big Mountain Paper Inc.
A spokesperson from Amazon said it displays country of origin information on product detail pages when available and is working to improve Alexa and make the information more accessible.
“Even as AI tools continue to grow in sophistication and capability, business incentives will shape how these advancements get deployed. Policymakers and enforcers have a vital role to play to ensure the public doesn’t get the short end of the stick,” Lina Khan said. She sued Amazon when working at FTC for holding illegal online retail monopolies and the case is still ongoing.