Mitigating AI Risks for Beauty Companies

Kelly Bonner and Agatha Liu of Duane Morris LLP shared their insights and experience with CosmeticsDesign on the risks of incorporating AI technology into business practices, and how can beauty companies protect themselves.

Common uses for AI in beauty & associated risks

One of the most common uses for AI technology is personalizing products and offering personalized product recommendations. “As beauty has become increasingly personalized,” Bonner explained, “companies are increasingly deploying AI technologies to enable customers to visualize new looks (virtual try-on tech) or communicate with customers via chatbots that act as virtual assistants and offer personalized product recommendations.”

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AI Implementation Risks in the Beauty Industry

Duane Morris partner Agatha Liu spoke with Personal Care Insights on potential risks, including personalization, appearance bias and regulatory compliance, as beauty companies integrate AI technologies.

How do you perceive the potential risks associated with integrating AI technologies to enhance customer experiences in the beauty industry?
Liu: In the beauty context, it’s important for companies to be aware of potential pitfalls in integrating AI technologies like virtual try-on technology (VTO), automated product or service applications or chatbots that act as virtual assistants and offer real-time, responsive product recommendations. These risks can include a lack of accuracy, lack of propriety (possibly giving offense), invasion of consumer privacy or possible IP infringement.

Read the full interview on the Personal Care Insights website. 

FTC Staff Issues Reminders to AI Companies

Today, the Staff in the Office of Technology of the Federal Trade Commission (“FTC”) posted a reminder to AI companies, enumerating the ways that they can run afoul of the laws enforced by the FTC. In particular, FTC Staff called out Model-as-a-Service companies, and impressed the importance of safeguarding individual and proprietary data involved in creating the models. FTC Staff indicated that there could be both consumer protection and competition concerns associated with a failure to do so. Further, FTC Staff warned that AI companies need to be forthcoming in how data is being used, and companies that omit material facts that would affect whether customers buy a particular product or service may run afoul of competition laws.

 

Guidelines Discuss Role of Tech in Mergers

On December 18, 2023, the U.S. Department of Justice (DOJ) and the Federal Trade Commission (FTC) jointly issued new Merger Guidelines. The new guidelines amend, update and replace the numerous versions of merger guidelines previously issued by both agencies.

Big tech platforms will likely continue to be in the agencies’ crosshairs, including by looking back or forward at smaller acquisitions that may enhance or extend dominant positions based on technology platforms or arguably eliminate potential competition.

Read the full Alert on the Duane Morris website. 

New White House Executive Order Highlights Increased Complexity in AI Regulation – A Cross-Practice Overview

Section authors: Sandra A. Jeskie, Michelle Hon Donovan, Robert Carrillo, Ariel Seidner, Milagros Astesiano, Alex W. Karasik, Geoffrey M. Goodale, Neville M Bilimoria, Edward M. Cramp, Ted J. Chiappari, Kristopher Peters and M. Alejandra Vargas.

The White House’s October 30, 2023 Executive Order on Safe, Secure, and Trustworthy Artificial Intelligence (“EO”) signals increased governmental regulation over the development and use of artificial intelligence (“AI”) models.  While the United States currently does not have a comprehensive AI regulation regime, many federal government agencies already regulate the use and development of AI through a complex framework of rules and regulations.  President Biden’s EO promises to add a new layer of complexity by introducing sweeping changes affecting a wide variety of industries.  Duane Morris’ multi-disciplinary team of AI attorneys are ready to help clients working with AI tools abreast of new regulations in this rapidly-evolving area of law.  Below, we summarize the most significant changes stemming from the White House’s most recent AI EO.

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Executive Order on Use of AI

On October 30, 2023, President Biden signed an Executive Order (the “EO”) providing guidance for employers on the emerging utilization of artificial intelligence in the workplace.  The EO establishes industry standards for AI security, innovation, and safety across significant employment sectors. Spanning over 100 pages, the robust EO endeavors to set parameters for responsible AI use, seeking to harness AI for good while mitigating risks associated with AI usage.

Read more on the Duane Morris Class Action Defense Blog.

Equal Employment Opportunity Commission & AI

AI in the workplace is ubiquitous and expanding rapidly. It is not only about replacing workers with robots, but instead is about the broader notion of using AI tools to assist with employment-related decisions. Commissioner Sonderling, more than any other EEOC official, has labored extensively in this area in terms of writing professional papers, giving speeches, and spearheading the Commission’s guidance in this area.

Read takeaways from the Employment Practices Liability Insurance Conference on the Duane Morris Class Action Defense Blog.

Mitigating AI Bias with Responsible AI Design

Now that artificial intelligence (AI) is employed widely with unprecedented consequences, there is quite a scramble to implement mitigating measures. For example, the United Trademark and Patent Office (USPTO) is soliciting public comments on what steps the USPTO should take to mitigate harms and risks from AI-enabled invention. Many of the proposed guardrails are applicable to the deployment of AI technology, to conform original output of the AI technology to desired principles, policies, guidelines, etc. However, it is no less valuable to improve the design of the AI technology, especially when various computational techniques can be readily applied.

One fundamental issue with the AI technology is producing inaccurate output, with random, sporadic errors or, more damagingly, systemic deviations leading to bias. This article presents a systematic review of how computational techniques can be utilized to help mitigate such bias.  […]

Read the full article by Agatha Liu, Ph.D. 

Taking Heed of AI Contracts

Duane Morris partner Neville M. Bilimoria authored the McKnight’s Long-Term Care article, “AI is everywhere! Addressing the legal risks through contracting.”

Mr. Bilimoria writes:

You can’t look in the news or see social media posts each day without hearing about artificial intelligence in healthcare. In fact, the advancements in AI in healthcare are making leaps and bounds, seemingly with each day that goes by.

But nursing homes and assisted living providers need to understand not just the benefits of how AI can improve quality of resident care and improved operations, but also the legal issues surrounding AI in your facility.

Read the full article on the McKnight’s Long-Term Care website.

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The opinions expressed on this blog are those of the author and are not to be construed as legal advice.

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