Amazon and Walmart‘s AI shopping tools can spot false “Made in USA” claims. However, the retailers are not using this ability to remove such listings. A new study from a think tank led by former FTC chair Lina Khan revealed this finding.

The report comes from Columbia Law School’s Center for Law and the Economy. Khan launched the center after returning to the university following her time at the Federal Trade Commission.

According to the study, Amazon’s Alexa for Shopping and Walmart’s Sparky assistants can detect mismatches. These occur between explicit “Made in USA” labels and conflicting details elsewhere in product listings. Even so, neither company appears to act on these detections.

Researchers also questioned the AI tools directly. When asked why false claims are not flagged, the chatbots reportedly gave business-related explanations rather than legal ones. Walmart’s Sparky said the FTC typically enforces such rules against manufacturers, not retailers. Still, the bot itself noted this was “a business calculation, not a legal justification,” the study said.

Meanwhile, Amazon’s Alexa gave a similar response. It reportedly stated that harm to US-made brands is real, but added that inaction remains easier until it creates cost for Amazon. Consequently, the findings raise fresh concerns about how AI systems balance accuracy with business incentives.

A spokesperson for Walmart did not immediately respond to a request for comment. Meanwhile, an Amazon spokesperson said country-of-origin information is displayed on product pages where available. The spokesperson added that the company is continually working to make such details more accessible through Alexa for Shopping.

Under FTC rules, products labeled “Made in USA” must be “all or virtually all” made domestically. Last year, the FTC urged both Amazon and Walmart to strengthen policing of such claims made by third-party sellers.

Khan, who sued Amazon during her FTC tenure over alleged monopoly practices, emphasized the stakes involved. She said business incentives will continue shaping how AI tools get deployed, even as the technology grows more sophisticated. Therefore, she added, policymakers and enforcers must ensure the public isn’t shortchanged.

The Amazon monopoly case remains ongoing. As AI shopping assistants expand across major retail platforms, the debate over enforcing Made in USA standards is likely to continue.

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