FTC Probed Over AI Chatbot 'Made in USA' Claims Suppression

Senators Tammy Baldwin and Rick Scott have called on the Federal Trade Commission (FTC) to investigate Amazon's Alexa for Shopping and Walmart's Sparky AI shopping assistant over allegations of suppressing information about U.S.-made products.

A study led by former FTC Chair Lina Khan found that the chatbots could prioritize information about goods made in countries like China, potentially misleading shoppers. The senators pointed out that researchers were able to identify potentially false 'Made in USA' claims using these AI assistants, but retailers are not utilizing this capability to police listings.

Amazon rejected the allegations, stating that it intentionally withholds country-of-origin information from customers is 'fundamentally wrong.' However, the study found that Alexa for Shopping directed users to product detail pages when asked about product origins, which Amazon claims helps ensure accuracy. Walmart's Sparky AI assistant cited limited FTC enforcement and described the issue as a business decision.

The senators urged the FTC to consider additional enforcement measures following what they called a strong investigation. At the time of writing, AMZN stock was trading 2.2% higher while WMT shares were down nearly 1%. The study's findings have sparked concerns about the impact on domestic manufacturers and shopper trust in product origins.