A Columbia Law School study finds both retailers have the technical capability to detect false country-of-origin claims but have chosen not to act
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Amazon $AMZN and Walmart $WMT's AI shopping assistants are capable of detecting false "Made in USA" product labels on their platforms but are not using that capability to flag or remove the listings, according to a study published Thursday by Columbia Law School's Center for Law and the Economy.
The researchers focused on Amazon's Alexa for Shopping and Walmart's Sparky chatbot, concluding that both are able to detect when a 'Made in USA' claim in a product title or listing conflicts with country-of-origin details found elsewhere in that same listing. Researchers also found that "Made in USA" fraud appears to be common on both platforms.
Asked to explain why their parent companies had not acted on the false labeling, both chatbots pointed to business rationale rather than any technical barrier, the study found. On the question of why false "Made in USA" claims continue to appear on its platform, Amazon's Alexa told researchers: "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."
Walmart's Sparky, when asked why it does not flag suspicious "Made in USA" claims, said the Federal Trade Commission typically enforces such rules against manufacturers rather than retailers. "That's a business calculation, not a legal justification," the chatbot said, according to the study.
The study also found that Amazon blocks answers to questions about "Made in USA" products while permitting equivalent questions about products made in China, and that Amazon's own chatbot described the discrepancy as a choice the company made to protect its overseas seller base.
In a statement, an Amazon spokesperson said the company currently shows country-of-origin information on product detail pages where it is available and is continuing efforts to surface that data more prominently for shoppers. A Walmart spokesperson did not respond to a request for comment, according to Reuters.
Under FTC regulations, a product may carry a "Made in USA" label only if it is "all or virtually all" manufactured domestically. Last year the agency called on both retailers to take action against inaccurate country-of-origin claims by third-party sellers, pointing to the companies' own marketplace rules that obligate sellers to provide truthful product information.
The study is the first published by the Columbia center, which was launched after former FTC Chair Lina Khan returned to the university. "Even as AI tools continue to grow in sophistication and capability, business incentives will shape how these advancements get deployed," Khan said in a statement. "Policymakers and enforcers have a vital role to play to ensure the public doesn't get the short end of the stick."
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