Amazon, Walmart AI can spot false ‘Made in USA’ claims but fail to warn shoppers

A new study has revealed that the AI shopping assistants developed by Amazon and Walmart are capable of detecting misleading "Made in USA" product claims but are not programmed to alert shoppers when inconsistencies appear. Conducted by a think tank led by former FTC Chair Lina Khan and published through Columbia Law School’s Center for Law and the Economy, the research found that Amazon’s Alexa and Walmart’s Sparky can recognize contradictions within product listings, such as items labeled "Made in USA" while simultaneously mentioning imported parts or overseas manufacturing details. Despite identifying these discrepancies, the AI assistants stop short of warning consumers, raising concerns about how companies choose to deploy artificial intelligence in online shopping.

The findings have renewed attention on existing Federal Trade Commission rules, which require products marketed as "Made in USA" to be almost entirely manufactured within the United States. The FTC has previously warned Amazon and Walmart about deceptive claims made by third-party sellers, emphasizing that misleading labels can harm both consumers and legitimate American manufacturers. Researchers argue that while AI systems are technically capable of improving transparency, commercial priorities and legal considerations may influence how companies use these technologies. Instead of proactively notifying customers, the AI assistants offered cautious explanations when questioned about the issue, highlighting the complex relationship between technology, corporate responsibility, and regulatory enforcement.

The report also reignites a broader debate over the role of artificial intelligence in consumer protection. Experts believe AI could become a powerful tool for identifying false advertising, misleading product descriptions, and marketplace fraud if companies choose to prioritize transparency.

Amazon stated that it already displays country-of-origin information where available and continues working to improve Alexa’s shopping experience. Meanwhile, Lina Khan argued that advances in AI alone are not enough, stressing that effective regulation and business accountability are essential to ensure technology genuinely serves consumers. As AI becomes increasingly integrated into online retail, the study highlights the growing need for stronger safeguards that balance innovation with consumer trust.