Amazon and Walmart possess AI shopping tools capable of detecting false Made in USA claims in product listings, yet research shows they are not regularly employing these capabilities to flag or remove suspicious products.
The discovery raises the risk of legal and regulatory consequences, since the Federal Trade Commission had previously urged both companies to strengthen monitoring of third-party merchants' origin claims, and regulators may view the gap between technical capability and enforcement action as intentional non-compliance.
What happened
A study found that Amazon's Alexa for Shopping and Walmart's Sparky can detect inconsistencies between product origin claims and other listing details, yet the companies are not regularly using those capabilities to flag or remove suspect ads.
Why it matters
Federal Trade Commission standards require anything branded Made in USA to be created wholly or almost entirely in the United States. The FTC had previously asked both companies to improve monitoring of third-party merchant claims. If regulators determine the companies possess the technology to catch deceptive statements but chose not to deploy it, Amazon and Walmart may face legal, regulatory, and reputational consequences.
What to watch
Investors should monitor whether regulators will push Amazon and Walmart to increase enforcement of product-origin disclosures, and whether the companies will begin actively using their AI tools to flag or remove suspect Made in USA claims.
A recent research study found that two major retailers—Amazon and Walmart—have deployed artificial intelligence shopping tools with the ability to detect false Made in USA product claims. Amazon's Alexa for Shopping and Walmart's Sparky were both shown to be capable of identifying inconsistencies between statements about the nation of origin and other details present in product listings.
However, the survey revealed a critical gap between technical capability and actual practice. While both AI systems can spot these red flags, Amazon and Walmart are not regularly employing those skills to flag or remove suspect advertisements from their marketplaces. This inaction occurs against a backdrop of regulatory pressure: the Federal Trade Commission had previously asked both companies to strengthen their monitoring of claims made by third-party merchants selling on their platforms.
Under FTC standards, anything branded Made in USA must be created wholly or almost entirely in the United States. The problem is compounded by the fact that misleading origin claims harm both consumers and honest sellers, and they undermine the integrity of the Made in USA label itself. When regulators discover that a company possesses the technology to detect such deceptive statements but has chosen not to deploy it, the consequences can extend beyond marketplace trust to legal and regulatory action. Amazon said in response that country-of-origin information is provided when accessible and that it continues to improve access to the data, while Walmart did not respond immediately to requests for comment.
The findings raise a question at the heart of modern commerce: whether AI shopping solutions are being built more to boost sales than to enhance marketplace compliance. Investors will be watching closely to see if regulators push Amazon and Walmart to increase enforcement of product-origin disclosures, and whether the companies will face consequences for the enforcement gap.
The study exposes a tension between capability and enforcement at two major e-commerce platforms. Amazon and Walmart have built AI systems into their shopping tools that can technically detect when product origin claims conflict with other listing data—a key indicator of false Made in USA statements. Yet the research indicates these companies are not systematically deploying those tools to remove or flag suspect ads, despite the FTC's prior request for stronger monitoring.
The significance lies in the regulatory and reputational risk this gap creates. The FTC has already signaled concern about Made in USA compliance on these platforms, and the finding that the companies possess—but are not actively using—detection technology could shift from a capability gap to a compliance problem. If regulators view this as intentional inaction despite technical ability, the consequences could include legal action, fines, or mandated enforcement protocols. Amazon's statement that country-of-origin information is provided "when accessible" and that it "continues to improve access to the data" suggests the company may be framing the issue as a data availability problem rather than an enforcement one, a distinction that may prove important in any regulatory proceeding.
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