By Jaspreet Singh
Sept 17 (Reuters) – Two US senators have called on the Federal Trade Commission to investigate Amazon and Walmart, claiming that their AI shopping chatbots may suppress “made in the USA” products and fail to flag fraudulently labeled goods.
In a letter sent to the FTC, senators Tammy Baldwin and Rick Scott said Amazon’s Alexa for Shopping and Walmart’s Sparky AI shopping assistants could be undermining efforts to promote American manufacturing and misleading consumers.
They highlighted the findings of a study by a think tank led by former FTC Chair Lina Khan that showed the chatbots suppress information about American-origin products while offering data on products made in other countries such as China.
“When asked why there is no Made in USA filter, Alexa replied that it would ‘redirect significant sales away from their largest seller base’, referring to overseas manufacturers,” the letter said, citing the study.
The study had also said AI shopping assistants can often detect when “made in USA” product labels are false, but the big retailers are not using that technology to crack down on the listings.
“The suggestion that we intentionally withhold country-of-origin information from customers is fundamentally wrong,” an Amazon spokesperson said in an emailed response.
“Alexa for Shopping is a continuously improving service, and to prioritize accuracy, we currently direct customers who ask about country of origin to product detail pages,” the spokesperson added.
The FTC declined to comment, while Walmart did not immediately respond to a Reuters request for comment. The Wall Street Journal first reported on the development.
According to the study, when researchers asked Walmart’s Sparky why it did not flag suspicious “made in USA” claims, the chatbot cited limited FTC enforcement against retailers, calling it “a business calculation, not a legal justification.”
“Following a robust investigation, we strongly encourage the Commission to consider additional enforcement measures to deter such behavior going forward,” the senators wrote in the letter.
The FTC last year sent letters to Amazon and Walmart urging them to crack down on third-party sellers’ “made in USA” claims, citing company policies requiring sellers to provide accurate information.
Khan sued Amazon when she was at the FTC, accusing it of holding illegal online retail monopolies. The case is ongoing.
(Reporting by Jaspreet Singh in Bengaluru and additional reporting by Anzar Mehraj in Bengaluru; Editing by Devika Syamnath, Tasim Zahid and Jonathan Ananda)
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