How Beauty Companies Can Mitigate Risks Associated with AI Technology Use

From L’Oreal and Olay to Procter & Gamble and Shiseido, companies across the beauty industry are embracing AI technology with open arms. But what are the risks of incorporating AI technology into business practices, and how can beauty companies protect themselves? […]

For answers to these questions and a closer look at this rapidly growing segment of the beauty industry, CosmeticsDesign spoke to attorneys Kelly Bonner and Agatha Liu of Duane Morris LLP, for their insights and experience. Kelly Bonner’s practice focuses on litigation risk and regulatory issues affecting businesses in the cosmetics and personal care industries, as well as cross-jurisdictional and complex commercial disputes involving FDA-regulated and consumer-branded products, and Agatha Liu has assisted clients with AI-related legal needs.

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Balancing Innovation and AI Regulations in the Beauty Market

Duane Morris’ Agatha Liu and Kelly Bonner were interviewed by Personal Care Insights about the challenges and opportunities beauty companies face while using AI to appeal to younger consumer demographics. Below is an excerpt of the article.

How does the competitive landscape of the beauty industry impact businesses’ use of AI technologies, especially when it comes to targeting younger consumer segments?
Bonner
: The highly competitive nature of the beauty industry, with its desire to appeal to younger consumers, is certainly a key driver in beauty brands embracing AI tools to offer enhanced customer shopping experiences.

Can you provide some context about US AI regulations that the beauty industry should know? What do you expect is coming, especially considering the AI Act in the EU?

Liu: The EU AI Act imposes specific obligations on the providers and deployers of so-called high-risk AI systems, including testing, documentation, transparency and notification duties.

To read the full interview, please visit the Personal Care Insights page.

Beauty Is in the AI of the Beholder

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.

What steps do you advise beauty companies to take to reduce the legal risks that could arise from implementing AI?
Liu: Very generally, companies should understand the technology they’re adopting and implementing and balance the benefits of the technology against potential legal pitfalls. That means liaising with outside counsel and privacy teams to obtain clarity and mitigate risks.  […]

Read the full interview on the Personal Care Insights website. 

2023 Regulatory Roundup: MoCRA

Updated deadlines, the announcement of a newly developed draft submission portal, and the release of several different draft guidance documents are just some of the developments that have occurred this year regarding MoCRA’s implementation of cosmetic safety regulations. As 2023 draws to a close, CosmeticsDesign spoke to attorney Kelly Bonner to review what’s happened so far with the Modernization of Cosmetics Regulation Act (MoCRA) and to understand what’s ahead.

To read the full text of this article, please  visit the CosmeticsDesign website.

Retailers’ Clean Beauty Claims Fuel Consumer Doubts and Lawsuits

In the beauty world, a “clean” product brings to mind one or more of the following features: sustainable, nontoxic, ethically made, cruelty-free, or even vegan.

Such broad associations speak to the appeal of “clean beauty” products: They can make consumers—especially climate-conscious Gen Z and millennials—feel like they’re making the better choice for themselves and the planet. The “clean beauty” market, which is forecast to expand to $15.3 billion by 2028, has grown from its roots in luxury and independent brands to take over shelves of products at mass-market retailers like Target.

But companies’ self-imposed definitions of what they consider to be “clean” has led to doubts about industry claims, fueling consumer-led class actions and raising the legal risk for companies trying to capitalize on product demand. While regulators are eyeing potentially misleading environmental advertising—and some beauty brands are even hoping they’ll clarify what’s “clean”—it’s the courts that will likely be the first to decide when use of the trendy term crosses into a type of greenwashing. […]

Still, the risk of regulatory enforcement for “clean” claims is fairly low, and it’s unlikely that the FTC will home in on the term for now, said Kelly Bonner, an attorney at Duane Morris who advises companies on consumer litigation and enforcement risks, including those in the beauty industry.

“I don’t think the FTC is going to focus so much on ideas of ‘clean’ or ‘natural’ given that it hasn’t defined these terms and it’s still unclear as to what these mean,” she said. “It’s more likely that it will get worked out in consumer protection suits and the courts.”

To read the full text of this article, please visit the Bloomberg Law website.

 

What’s Driving Beauty Brands to Shutter in 2023?

Duane Morris partners Robert Kum and Cyndie Chang are quoted in the Glossy article “The unseen legal turmoil driving beauty brands to shutter in 2023.”

Despite positive projections about the future of the beauty industry, insiders say brands of all sizes are quietly grappling with unseen legal struggles.

[Founders] blamed, in large part, the California Safe Drinking Water and Toxic Enforcement Act of 1986, better known as Prop 65.

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MoCRA Requires Federal Regulatory Overhaul

On December 23, 2022, Congress enacted the Modernization of Cosmetics Regulation Act (MoCRA)—the first major statutory change to the U.S. federal government’s ability to regulate cosmetics since 1938. Passed with bipartisan
and industry support, MoCRA expands the Food and Drug Administration’s authority over cosmetics, and creates substantial new obligations for manufacturers, packers and distributors of cosmetics intended for sale in
the United States. Here’s what beauty companies need to know.

To read the full text of this article by Duane Morris attorney Kelly Bonner, please visit the firm website,

Post-MoCRA Regulatory Compliance Checklist for Beauty and Personal Care Products

MoCRA, Pub. L. No. 117-328, represents the first major statutory change to the authority of the Food and Drug Administration (FDA) to regulate cosmetics since the Food, Drug, and Cosmetics Act (FDCA), 21 U.S.C. § 361 et seq.,
in 1938 and the Fair Packaging and Labeling Act (FPLA), 21 C.F.R. § 701.3, in 1966.

This checklist outlines key regulatory compliance considerations that are specific to personal care products marketed in the United States following the enactment of the federal Modernization of Cosmetics Regulation Act (MoCRA) on December 23, 2022.

To read the full text of this Lexis Nexis Practical Guidance Checklist by Duane Morris attorneys Driscoll UgarteRick BallAlyson LotmanKelly Bonner and Coleen Hill, please visit the firm 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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