Amazon and Walmart’s AI shopping tools can detect false “Made in USA” claims on their platforms but have not implemented the feature to remove or flag misleading listings. A recent study from Columbia Law School revealed this gap, highlighting a disconnect between technological capability and corporate enforcement. The research, conducted by the school’s Center for Law and the Economy, tested how these AI systems interact with product listings that misrepresent their origins, finding that while the tools could identify discrepancies, neither company had integrated them into active compliance measures.
The study examined Amazon’s Alexa for Shopping and Walmart’s Sparky AI assistants in controlled scenarios. Both tools were able to cross-reference product descriptions with supply chain data to identify inconsistencies between products marketed as American-made and information showing they were imported or originated elsewhere. Despite this functionality, the study found no evidence that either company had configured the AI to automatically alert customers, internal compliance teams, or regulators when discrepancies were detected.
AI assistants call inaction a business decision
The study found that the AI tools described the lack of action as intentional, framing it as a business decision rather than a technical limitation. Walmart’s Sparky stated that regulators typically pursue manufacturers rather than retailers over misleading origin claims. Meanwhile, Amazon’s AI reportedly restricted responses to questions about U.S.-made products while allowing similar searches for goods made in China, attributing the difference to its commercial relationship with its overseas seller base.
Lina Khan, former Federal Trade Commission chair and the report’s lead researcher, noted that the findings demonstrated how commercial incentives influence how retailers deploy AI technology. Amazon said country-of-origin information was displayed on product pages when available and that it was continuing to improve Alexa for Shopping’s ability to provide the details accurately. The company added that it takes action when sellers are found to have breached its policies. Walmart did not immediately comment on the findings.
Regulators step in
The Federal Trade Commission wrote to Amazon and Walmart in July 2025, calling on the retailers to clamp down on third-party sellers making potentially deceptive “Made in USA” claims. Under U.S. rules, products using the label must be “all or virtually all” manufactured in the country. Companies breaching the regulations can face legal action and financial penalties.
Retailers have faced challenges in monitoring origin claims, particularly on large third-party marketplaces where millions of listings are added daily. The study indicated that the necessary tools for oversight exist but remain unused. For instance, Amazon’s AI could scan product descriptions and cross-check them with available data, while Walmart’s Sparky could integrate with supply chain records. The study suggested that the primary obstacle was not technological but corporate, as implementing such measures could require additional resources or risk seller pushback.
Future developments may hinge on whether regulators increase pressure, as the FTC has signaled a willingness to pursue legal action if voluntary changes are not made. The study’s findings could also influence state-level enforcement, as several states have their own laws governing origin labeling. For now, the AI assistants recognize the issue but have not addressed it, leaving consumers to handle a marketplace where misleading claims persist despite the tools’ ability to detect them.
Millions of third-party listings appear on Amazon and Walmart’s platforms, many with questionable origin claims. While the study did not measure the scale of mislabeling, it confirmed that both companies’ AI tools could spot inconsistencies when tested. The researchers noted that the AI systems were particularly effective at identifying red flags, such as products labeled as “Made in USA” that had identical listings on Chinese e-commerce sites. They also detected patterns where sellers used vague language to imply domestic manufacturing while sourcing components overseas. These tactics exploit consumer trust in the “Made in USA” label, which is often associated with higher quality and ethical labor practices.
This disconnect between capability and enforcement creates uneven accountability. The study highlighted cases where Amazon and Walmart removed listings only after receiving complaints from competitors, regulators, or consumer advocacy groups, rather than through proactive monitoring. This reactive approach allows mislabeled products to remain available for extended periods, exposing consumers to deception while also undermining legitimate American manufacturers who comply with labeling laws.
A separate sale agreement involving a major retailer highlights how companies often prioritize cost-cutting over compliance, though the specifics were not directly related to “Made in USA” claims. The study’s authors cited it as an example of how corporate decision-making may deprioritize compliance in favor of financial considerations.
