US senators urge FTC probe into Amazon, Walmart AI chatbots over 'Made in USA' claims

US Senators Tammy Baldwin and Rick Scott have urged the Federal Trade Commission (FTC) to investigate Amazon and Walmart's AI shopping chatbots, citing concerns that they may suppress "Made in USA" products and fail to identify fraudulently labeled goods. The senators highlighted findings from a study led by former FTC Chair Lina Khan, which suggested that these AI assistants could be undermining efforts to promote American manufacturing and misleading consumers.

According to the letter sent to the FTC, the study indicated that when asked about a "Made in USA" filter, Amazon's Alexa for Shopping responded that it would "redirect significant sales away from their largest seller base," referring to overseas manufacturers. The study also found that AI shopping assistants can often detect when "made in USA" product labels are false, but major retailers are not utilizing this technology to address such listings. When researchers questioned Walmart's Sparky chatbot about its failure to flag suspicious "made in USA" claims, it reportedly cited limited FTC enforcement against retailers as a "business calculation, not a legal justification."

The senators emphasized a shared goal of strengthening American manufacturing and small businesses through "Made in USA" labeling, while ensuring consumers receive accurate product origin information. They strongly encouraged the Commission to consider additional enforcement measures to deter such behavior. Last year, the FTC had previously sent letters to Amazon and Walmart urging them to crack down on third-party sellers' "Made in USA" claims. The Wall Street Journal first reported on this development.