Walmart NASDAQ:WMT, a major retailer operating physical stores and online marketplaces, fell approximately 2.4% in Thursday's regular-session trading as investors assessed a study examining its artificial-intelligence shopping assistant. Researchers from Columbia Law School's Center for Law and the Economy said Walmart's Sparky assistant could identify inconsistencies between Made in USA claims and other information in product listings. However, the study said the technology was not being used to flag or remove questionable claims automatically.
When researchers asked Sparky why suspicious listings were not flagged, it responded that the Federal Trade Commission generally enforces origin-labeling rules against manufacturers rather than retailers. The researchers said that explanation reflected a business calculation instead of a legal justification. Walmart did not immediately respond to Reuters' request for comment regarding the study.
FTC rules require products advertised as Made in USA to be entirely or almost entirely produced domestically. The regulator previously urged Walmart and Amazon.com NASDAQ:AMZN, an e-commerce and cloud-computing company, to address inaccurate claims by third-party sellers, citing marketplace policies requiring sellers to provide truthful information. The study may increase attention on whether retailers should apply their AI capabilities more aggressively to marketplace compliance. Investors may now assess whether the findings lead to additional regulatory scrutiny, compliance spending or changes to how Walmart's Sparky assistant presents product-origin information.