Senators Push FTC to Investigate Amazon and Walmart AI Shopping Bots Over 'Made in USA' Data
Bipartisan letter alleges Alexa and Sparky suppress domestic product information while failing to flag fraudulent origin labels
Senators Baldwin and Scott want the FTC to probe whether Amazon and Walmart's AI shopping assistants deliberately hide American-made products from consumers.
The Letter and Its Claims
Senators Tammy Baldwin (D-WI) and Rick Scott (R-FL) sent a letter to FTC Chairman Andrew Ferguson and Commissioner Mark Meador on September 17, asking the agency to investigate Amazon and Walmart over how their AI shopping assistants handle country of origin data. The core allegation: both Amazon's Alexa for Shopping and Walmart's Sparky can identify whether products are made in the USA but choose not to surface that information to shoppers.
The senators cited a report from Columbia Law School's Center for Law and the Economy titled "Made in America, Hidden by AI." According to the letter, when researchers asked Alexa for Shopping to find American-made products, the chatbot claimed it didn't have access to that information. The research also found that both chatbots could identify potentially false "Made in USA" claims but the retailers aren't using that capability to police listings.
One of the more pointed findings: when researchers asked why this fraud isn't flagged, both chatbots reportedly responded that it was a business decision. Sparky allegedly stated that because the FTC pursues relatively few cases against retailers, the incentive to create proactive compliance mechanisms is low. That's a blunt admission, if accurate, and exactly the kind of statement regulators will want to examine.
Amazon and Walmart Respond
Amazon pushed back on the characterization. The company told reporters that any suggestion it intentionally withholds country of origin information is wrong. Amazon said that origin data, when available, is displayed on product detail pages, and that the company is continually working to improve Alexa for Shopping's ability to provide this information accurately.
Walmart did not immediately respond to requests for comment. The FTC confirmed receipt of the letter but declined to say whether it would open an investigation.
This isn't the first time these platforms have been on the FTC's radar over Made in USA claims. In July 2025, the agency sent letters to both Amazon and Walmart alerting them that third-party sellers were falsely labeling products as American made, potentially violating federal standards and marketplace terms of service. Those letters encouraged both companies to monitor, identify, and take corrective action against sellers making false origin claims.
The Regulatory Context
Under FTC guidance, an unqualified "Made in USA" claim generally requires the product to be all or virtually all made in the United States. Qualified claims like "Assembled in USA from imported parts" need to accurately describe the actual manufacturing basis. The standard is not new, but enforcement in the age of algorithmic shopping recommendations creates novel questions.
President Trump signed an executive order in March cracking down on false American-made claims in digital marketplaces. The bipartisan nature of this letter, with a Florida Republican and Wisconsin Democrat aligned, reflects broader political support for domestic manufacturing protections. Trade friction with China and reshoring incentives have made "Buy American" a rare point of consensus in Washington.
The question the senators are raising isn't just about product labels. It's about whether AI systems, which increasingly mediate the shopping experience, have their own disclosure obligations. If a chatbot can determine a product's origin but is programmed not to share that information, does that constitute a deceptive practice?
What This Means for the Platforms
Neither Amazon nor Walmart faced immediate stock pressure from the letter. AMZN and WMT both opened flat this morning. Regulatory probes of this nature take months to materialize into anything actionable, and the FTC hasn't committed to investigating.
But the optics matter. Both companies are heavily invested in AI shopping experiences. Amazon has been expanding Alexa's commerce capabilities, while Walmart launched Sparky as a direct competitor. If regulators conclude that these tools are designed to maximize platform revenue at the expense of consumer transparency, that creates headaches beyond a single enforcement action.
The senators requested that the FTC consider additional enforcement measures after completing any investigation. That language suggests they're not just looking for a one-time fix but potentially for new rules governing how AI shopping assistants handle product information. For Amazon and Walmart, the best outcome is probably a voluntary compliance commitment before formal rulemaking begins.
The AI Shopping Arms Race
This probe request lands amid a broader push by major platforms to integrate AI into consumer shopping. Credit card companies are developing AI agents that will shop on behalf of customers. Google and Meta are both building conversational commerce features. The premise across all of these is that AI can reduce friction, personalize recommendations, and drive conversion.
What the senators' letter highlights is the tension between optimization and transparency. AI systems trained to maximize purchases may learn to de-emphasize factors that reduce conversion, even if those factors matter to consumers. Country of origin is one example. Environmental impact, labor practices, or ingredient sourcing could be others.
The FTC has existing authority to pursue deceptive practices, but AI recommendation systems exist in a gray zone. They don't make explicit claims. They curate. The question regulators will need to answer is whether algorithmic curation carries the same disclosure obligations as explicit marketing claims.
What to Watch
The immediate variable is whether the FTC opens a formal investigation. Chairman Ferguson has shown willingness to pursue tech enforcement, and the bipartisan backing gives the agency political cover. If the FTC declines, expect the senators to escalate, potentially through hearings or legislative proposals.
For traders watching WMT and AMZN, this isn't a positioning event yet. Neither stock has options flow suggesting concern about regulatory risk from this specific issue. But the theme of AI liability is one that will recur across multiple sectors. Consumer finance, healthcare, and employment are all facing similar questions about algorithmic transparency.
The level to watch is whether either company announces voluntary changes to their AI shopping assistants before the FTC acts. Preemptive compliance often signals that internal legal teams see real risk. Silence, on the other hand, suggests they're willing to fight the characterization. Monitor for any policy updates from either platform in the next 30 to 60 days.
For informational purposes only. Not investment advice. Published Friday, September 18, 2026.