FTC urged to investigate AI shopping assistants over 'Made in USA' claims

The Alliance for American Manufacturing has asked the Federal Trade Commission to open an inquiry into the AI shopping assistants operated by major online retailers, arguing that the tools may be obscuring country-of-origin information and steering shoppers away from American-made goods.

The trade advocacy group set out its request in a letter to the commission dated August 27, which it published on September 3. The letter asks the FTC to examine whether AI shopping tools return accurate and consistent country-of-origin information, whether they are more likely to surface foreign-made products than comparable domestic ones, and whether claims that origin data is unavailable hold up when that data appears elsewhere on the same platform.

The request follows a study published on July 30 by Columbia Law School's Center for Law and the Economy, the research centre led by former FTC chair Lina Khan. The paper, "Made in America, Hidden by AI," was written by senior fellow Erie Meyer and program manager Zachary Harris. It tested Amazon's Alexa-based shopping assistant and Walmart's Sparky, and concluded that both systems can detect contradictions in "Made in USA" claims but do not flag them.

Asked why, Walmart's assistant cited the low historic risk of enforcement against retailers rather than manufacturers, telling researchers the position was "a business calculation, not a legal justification." Amazon's assistant, according to the report, attributed its behaviour to its seller base — between 40 and 50 percent of which is China-based — and said a functioning Made in USA filter "would visibly redirect shoppers away from a very large portion" of the site's listings.

"Hiding it was a choice and it shows the dangers of unregulated agentic shopping," Meyer told The American Prospect.

AAM's letter grounds its case in existing law rather than new regulation. It notes that the FTC's Made in USA standard requires unqualified claims to be truthful and substantiated, and that goods marketed as such be "all or virtually all" made in the United States. It also points to Section 5 of the Federal Trade Commission Act, which gives the commission authority over unfair or deceptive acts and practices, including misleading advertising.

The group frames the issue against public unease about AI more broadly. Morning Consult polling commissioned by AAM in December 2025 found nearly seven in ten respondents were concerned that AI could damage domestic manufacturing employment.

For apparel, the stakes are direct. Origin claims are among the most heavily policed marketing statements in clothing and footwear, and conversational search is becoming a primary discovery layer on both marketplaces. The Columbia study's controlled queries centred on sporting goods rather than apparel, so its findings have not been tested against clothing listings.

AAM also renewed its support for the Country of Origin Online Labeling (COOL) Online Act, introduced by Senator Tammy Baldwin (D-Wisconsin), which would mandate country-of-origin disclosure for products sold online.

Neither Amazon nor Walmart responded to the Columbia researchers or disputed the report's findings, according to The American Prospect. The FTC has not publicly responded to AAM's letter.