The report focuses on Amazon and Walmart, whose AI-powered shopping assistants were found to be capable of detecting inconsistencies between products advertised as being made in the United States and information elsewhere in their listings that suggests otherwise.
Researchers said the findings highlight the tension between the growing sophistication of artificial intelligence and the commercial incentives that influence how companies choose to deploy the technology.
The study was published by Columbia Law School's Center for Law and the Economy, a think tank launched after former U.S. Federal Trade Commission (FTC) Chair Lina Khan returned to the university following her tenure at the agency.
AI Can Detect Mislabeled Products, Researchers Say
According to the study, Amazon's Alexa for Shopping and Walmart's Sparky shopping assistants were able to identify contradictions between explicit "Made in USA" claims and other product information indicating that items may have been manufactured elsewhere.
Researchers went a step further by asking the AI assistants why the companies were not taking stronger action against such listings.
In one example cited in the report, Walmart's Sparky explained that enforcement of "Made in USA" rules is generally directed at manufacturers rather than retailers.
"That's a business calculation, not a legal justification," Walmart's chatbot said, according to the study.
Walmart did not immediately comment on the findings.
Amazon, meanwhile, said it continues to improve the information available to shoppers.
"Country-of-origin information, when available, is currently displayed on product detail pages, and we're continually working to improve Alexa for Shopping to make this information even more accessible for customers," an Amazon spokesperson said.
Lina Khan Warns Business Incentives Shape AI Deployment
Commenting on the report, Lina Khan said the study demonstrates that technological capability alone does not guarantee consumer protection.
"Even as AI tools continue to grow in sophistication and capability, business incentives will shape how these advancements get deployed. Policymakers and enforcers have a vital role to play to ensure the public doesn't get the short end of the stick," Khan said.
The report comes amid increasing scrutiny of how companies use artificial intelligence in online marketplaces, particularly where consumer protection and product transparency are concerned.
FTC Rules Require Accurate 'Made in USA' Claims
Under FTC regulations, products marketed as "Made in USA" must be "all or virtually all" manufactured in the United States.
Last year, the FTC urged both Amazon and Walmart to strengthen oversight of third-party sellers making such claims, noting that each company already requires sellers to provide accurate product information.
The study also highlighted a response generated by Amazon's Alexa when asked why false "Made in USA" claims remained on the platform.
According to the researchers, the AI assistant replied:
"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."
The report did not suggest that the response reflected official company policy but presented it as an example of how generative AI can analyze commercial incentives behind corporate decisions.
Ongoing Regulatory Scrutiny
The findings add another dimension to the broader debate over the responsibilities of online marketplaces in monitoring product listings and ensuring compliance with consumer protection laws.
Khan, who led the FTC before returning to academia, previously filed an antitrust lawsuit against Amazon, accusing the company of maintaining illegal monopolies in online retail. That case remains ongoing.
As artificial intelligence becomes increasingly integrated into online shopping experiences, researchers argue that regulators and technology companies will face growing pressure to ensure AI is used not only to improve convenience for consumers but also to strengthen transparency, accuracy and trust in digital marketplaces.