“The harm to U.S.-made brands is real and documented, but until that harm creates a financial, regulatory, or reputational cost for Amazon specifically, it remains easier to do nothing.” That’s not a leaked memo. It’s Amazon’s own AI shopping assistant, asked directly why false “Made in USA” claims keep showing up on the platform.
The admission surfaced in a new study led by former FTC chair Lina Khan. Her researchers found that Amazon’s Alexa for Shopping and Walmart’s Sparky can both often detect when a “Made in USA” claim contradicts other details in a listing, detection neither company appears to be using to actually pull the listings down. It’s a gap YourNewsClub frames less as a failure to catch fraud than as a refusal to act on fraud already caught, which is a meaningfully different problem.
FTC rules require “Made in USA” products to be “all or virtually all” domestically made. The agency told both retailers last year to enforce exactly that standard against third-party sellers.
The mixed-incentive problem isn’t unique to this specific fraud category. Retailers have poured resources into AI shopping assistants because analysts expect the technology to reshape how people buy online altogether: one bank estimated AI platforms drove roughly 0.4% of U.S. online sales in 2025, a share it expects to climb toward 10% by 2029. That growth trajectory is exactly why neither Amazon nor Walmart has much incentive to have its own assistant start declining purchases over a labeling dispute it isn’t legally required to police itself.
Maya Renn, whose work focuses on the ethics of computation and access to power through technology, points to the incentive sitting underneath all of it. “Retailers built these assistants to drive more purchases,” she said. “That incentive runs directly against acting on fraud the same tool happens to be able to catch.” What’s unusual, YourNewsClub isolates it, isn’t the conflict itself, it’s that a company’s own product said the quiet part out loud, unprompted, in response to a direct question.
Khan sued Amazon over alleged illegal retail monopolies while she was still FTC chair, a case that’s ongoing, and one YourNewsClub weighs as the obvious motive behind the study’s existence, even if that doesn’t make the chatbot’s own words any less real.
Jessica Larn, who studies macro-level technology policy and infrastructure impact of AI, reads the study’s timing as inseparable from that lawsuit. “This isn’t neutral research,” she said. “It’s evidence directly relevant to a case Khan is already pursuing.” That doesn’t make the finding wrong. It makes it worth reading on its own terms, independent of who paid for the researchers who surfaced it.
Walmart, notably, hasn’t responded publicly to the study’s findings about Sparky at all, leaving Amazon’s chatbot as the only one of the two whose own reasoning has actually been quoted back at the public. Whether that’s a meaningful difference in the companies’ respective postures, or simply a matter of which assistant happened to answer the researchers’ specific question, isn’t yet clear from the study itself. Neither company disputes the technical finding. What happens next is a regulatory question now, not a corporate one, since Alexa already named the missing variable itself, cost. Whether the FTC actually supplies it is what Your News Club tracks from here, more than anything either retailer says publicly.