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AI ecommerce automation concept. Person using laptop with shopping cart, chatbot, analytics and workflow icons, smart retail technology, online store management, customer support, digital sales growth<\/p>\n
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Shoppers increasingly are abandoning the search bar for an AI agent\u2019s chat box. McKinsey calls AI the online shoppers\u2019 \u201cnew front door<\/a>.\u201d Fellow Forbes.com contributor Greg Petro describes AI-powered shopping as \u201cconversational commerce<\/a>\u201d and predicts it will lead to the \u201cinevitable sunset of traditional search advertising.\u201d <\/p>\n And where shoppers go\u2014nearly 60% of shoppers have used AI to shop, according to the University of Virginia\u2019s Darden School of Business<\/a>\u2014the advertising dollars follow. eMarketer predicts<\/a> that advertising spending allocated to AI will reach $32 billion in 2026 and more than double to $68 billion by 2030. This compares roughly to $48 billion invested in SEO<\/a> in North America during 2025. <\/p>\n Over the years, consumers have learned that brands pay for the privilege of being first in search results, but they may not realize that similar pay-to-play dynamics may be operating behind the scenes within their favorite AI agents\u2014potentially leading shoppers to be misled without ever knowing it. <\/p>\n Shoppers expect AI to deliver personalized, independent and objective results\u2014Darden found 46% of consumers trust AI more than a friend for outfit advice\u2014yet they may be unaware of potential conflict of interest between what is best for advertisers and what is best for them. Congress and the FTC are signaling that new guardrails may be needed to ensure AI agents aren\u2019t quietly serving up choices shaped by advertisers rather than consumers\u2019 stated needs.<\/p>\n Conflicts Of Interest<\/p>\n In a provocative study, \u201cAds In Chatbots?<\/a> An Analysis of How Large Language Models Navigate Conflicts of Interest,\u201d Princeton University researchers found that across a number of LLM models tested using simulated chatbot deployment settings, almost all recommended a sponsored option over a less-expensive non-sponsored one. And users with high economic status\u2014those who can pay more\u2014were more likely to be presented with sponsored options.<\/p>\n Their tests also found instances where sponsored options appeared designed to disrupt the purchase process, cases in which prices were concealed in unfavorable comparisons and repeated failure to disclose paid placements. <\/p>\n While this is a preliminary study and LLMs are changing so rapidly it\u2019s hard to keep up, the researchers present their methodology as a framework to uncover conflicts of interest when advertising is introduced into AI assistants.<\/p>\n The researchers warned, \u201cAll current LLMs exhibit risky behaviors favoring the company over the user,\u201d and they concluded that incorporating advertising into LLM is \u201cfraught with challenges and troublesome model tendencies that if handled incorrectly, may considerably damage the information ecosystem that these systems provide.\u201d<\/p>\n FTC Warns Of Deceptive Practices<\/p>\n The FTC is beginning to take notice of how AI can mislead consumers and \u201csteer the output of its systems contrary to consumers\u2019 reasonable expectations.\u201d In a proposed policy statement<\/a> posted earlier this month, the FTC requested public comments to guide its decision-making related to the accuracy of artificial intelligence systems.<\/p>\n The agency framed its concerns around information integrity\u2014specifically, that AI outputs not be colored by hidden agendas, undisclosed objectives or ideological bias. However, under its authority to protect consumers from \u201cunfair or deceptive acts or practices in or affecting commerce,\u201d the same standard would likely apply if AI systems quietly favored products and services from undisclosed advertisers. <\/p>\n If consumers reasonably expect AI agents to provide independent, objective results, and the systems instead steer them toward advertisers\u2019 choices without disclosure, it could get dangerously close to deceptive practices. <\/p>\n Or as the FTC stated, \u201cThe Commission believes AI companies that steer the outputs of their AI systems toward unexpected objectives, and away from the objectives set by or reasonably expected by users, are likely to deceive consumers in violation of section 5 of the FTC Act.\u201d <\/p>\n Proposed AI Agent Act Provides Guiderails<\/p>\n While the FTC has yet to officially leap into the issue of AI-embedded advertising, Sen. Mark Warner has<\/a> taken a first step. He recently released a discussion draft of proposed legislation\u2014 the \u201cArtificial Intelligence Access, Gatekeeper Exchange and Nondiscriminatory Transfer Act.\u201d The goal of the AI Agent Act is to establish federal guidelines to \u201cprotect consumer choice, promote fair competition and ensure AI Agents operate in the best interests of the users they represent.\u201d <\/p>\n In effect, Warner\u2019s legislative framework puts the consumer first in the emerging AI ecosystem. Among its provisions are to establish an FTC registry of trusted and secure AI agents and establish a \u201cregulatory environment\u201d that can swiftly approve innovative user services and quickly curtail those that violate consumers\u2019 trust. It also would require AI agents to protect users\u2019 privacy and act \u201ctransparently in a user\u2019s best interest.\u201d<\/p>\n Warner calls on the government to establish clear rules and guidelines to ensure that consumers can choose the products and services that best meet their needs, not those of an outside party. <\/p>\n \u201cAs agentic AI transforms how Americans interact with technology, consumers deserve a real choice in the marketplace\u2014and AI agents must be accountable to the people they serve,\u201d Sen. Warner wrote.<\/p>\n Still Early Days<\/p>\n As of now, ChatGPT is the only major independent, conversation-based AI system open to advertising. (Note: the Princeton researchers conducted simulated tests using existing chatbot settings.) However, eMarketer analyst Nate Elliott predicts that by 2030 all major platforms will be selling advertising and showing it to users. \u201cThe audience on those platforms will be too large and too intent-rich for that not to happen,\u201d he stated.<\/p>\n In addition, both Walmart and Amazon\u2014the nation\u2019s two largest retailers\u2014have AI-powered shopping assistants: Walmart\u2019s Sparky and Amazon\u2019s enhanced Alexa+. According to Walmart CEO John Furner in his April earnings call, shoppers who used Sparky spent roughly 35% more than those who did not, and the number of active weekly Sparky users more than doubled in the last quarter. <\/p>\n Walmart also reported new capabilities are being added to Sparky by the day, including automatic replenishment, meal planning and \u201cmore intelligent recommendations based on our inventory positioning, our prices, and our delivery speed capabilities,\u201d said David Guggina, CEO of Walmart U.S. <\/p>\n Notably, the emphasis in his remarks is on Walmart\u2019s inventory, prices and delivery speed\u2014suggesting Sparky is optimized around the company\u2019s priorities, not necessarily the customers\u2019 stated needs. <\/p>\n This issue has caught the attention of the Groundwork Collaborative, a public policy advocacy group. In a The Capitol Forum<\/a> op-ed, executive director Lindsay Owens wrote, \u201cTroubling for users and economic fairness writ large, it is increasingly apparent that their choices are determined not by the consumer\u2019s interest but by the bottom line of the companies that build and deploy them.\u201d <\/p>\n \u201cAI agents could be immensely useful,\u201d she continued. \u201cThe question is whether the law will require them to be useful to you\u2014saving you time and finding the best deal\u2014or whether it will allow them to serve corporate bottom lines at your expense.\u201d<\/p>\n Retailers Can Take The Lead<\/p>\n Retailers have always prospered when they put the customers\u2019 needs above their own. Walmart and Amazon are among the preeminent examples. But as Owens observed, even the leaders in AI development admit that they \u201cdo not understand how [their] own AI creations work.\u201d <\/p>\n Before regulators and legislators take aim at their businesses, retailers have the opportunity to establish their own AI guardrails. That means ensuring that their proprietary AI agents, as well as the third-party agents they rely on, serve customers responsibly and with full transparency. Done right, retailers can lead this next era of AI-mediated shopping to benefit consumers and the long-term sustainable growth of their businesses. <\/p>\n See Also:<\/p>\n ForbesIs The Retail Industry Ready For The Booming \u201cChat\u201d Economy?By Greg Petro<\/a>ForbesAI Ad Spending Will Reach $32 Billion In 2026, And Paid Search Teams Are Already Running ItBy Gabriel Alin Zainescu<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"AI ecommerce automation concept. 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