Two US senators recently urged the Federal Trade Commission (FTC) to investigate Amazon and Walmart, criticizing the two retail giants’ shopping chatbots for failing to accurately identify products with deceptive labels, mislabeling them as “Made in America” and therefore harming truly “Made in America” products.
Senators Tammy Baldwin (Democrat from Wisconsin) and Rick Scott (Republican from Florida) wrote a letter to the FTC expressing concerns that Amazon’s Alexa shopping assistant and Walmart’s Sparky AI shopping assistant may undermine efforts to support American manufacturing and mislead consumers.
The senators highlighted a study led by former FTC chair Lina Khan’s think tank, which found that shopping chatbots suppress information about products made in the US while providing data about products manufactured in countries like China.
Citing the study, the senators pointed out that once the “Made in America” filter is added, sales of foreign manufacturers could be significantly impacted. The study also noted that AI shopping assistants were capable of detecting the authenticity of “Made in America” product labels, but these two retail giants failed to utilize this technology to differentiate similar products.
Researchers asked Walmart’s chatbot Sparky why it didn’t flag suspicious “Made in America” labels, to which the chatbot responded by mentioning the limited enforcement power of the FTC over retailers and claiming it was done “for commercial reasons without legal basis.”
An Amazon spokesperson replied to Reuters in an email stating that the claim that they intentionally hide the country of origin information from customers is fundamentally incorrect.
The spokesperson explained that Alexa’s shopping service is a “constantly evolving service” and to prioritize accuracy, “we currently direct customers inquiring about the country of origin to the product details page.”
Walmart did not immediately respond to Reuters’ request for comment, and The Wall Street Journal was the first to report on the issue. The FTC declined to comment.
In their letter, the senators wrote, “After thorough investigation, we strongly urge the FTC to consider additional enforcement measures to prevent such behavior from happening again.”
The FTC had previously written to Amazon and Walmart last year, urging them to crack down on third-party sellers’ false advertising of products as “Made in America” and citing company policies requiring sellers to provide accurate information.
During Khan’s tenure as an FTC commissioner, she sued Amazon for alleged illegal monopolization of online retail, and the case is still pending.
(This article is based on Reuters’ report)