Common Uses for AI in Beauty & Associated Risks

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.

While “today’s AI technology can save a fair amount of time in not only performing conventional services, but also uncovering hidden insight into consumer motivation and behavior,” Liu noted, “on the other hand, today’s AI technology generally lacks transparency and suffers from hallucination and thus still requires a considerable amount of human review.” Therefore, she recommended that “while companies are encouraged to incorporate AI technology into their offerings, they should closely monitor how it is utilized and what it produces and make adjustments or take remedial steps as appropriate.” […]

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Artificial Intelligence Discussed at Legalweek

Privacy and data breach class action litigation, as well as artificial intelligence issues, are among the key issues that keep businesses and corporate counsel up at night. There was over $1 billion procured in settlements and jury verdicts over the last year for these types of “bet-the-company” cases.  At the ALM Law.com Legalweek 2024 conference in New York City, Duane Morris partner Alex W. Karasik was a panelist at the session “Trends in US Data Privacy Laws and Enforcement.” The conference, which had over 6,000 attendees, produced excellent dialogues on how cutting-edge technologies can potentially lead to class action litigation.

Read more on the Duane Morris Class Action Defense Blog.

Discrimination Suits Rise with AI Recruiting Software

In Mobley v. Workday, Inc., Case No. 23-CV-770 (N.D. Cal. Jan 19, 2024) (ECF No. 45), Judge Rita F. Lin of the U.S. District Court for the Northern District of California dismissed a lawsuit against Workday involving allegations that algorithm-based applicant screening tools discriminated applicants on the basis of race, age, and disability. With businesses more frequently relying on artificial intelligence to perform recruiting and hiring functions, this ruling is helpful for companies facing algorithm-based discrimination lawsuits in terms of potential strategies to attack such claims at the pleading stage.

Read more on the Duane Morris Class Action Defense Blog.

Reminders for AI Companies from FTC

On January 9, 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.

AI Executive Order Impacts Different Sectors

The White House’s October 30, 2023, Executive Order on Safe, Secure and Trustworthy Artificial Intelligence signals increased governmental regulation over the development and use of artificial intelligence 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 order promises to add a new layer of complexity by introducing sweeping changes affecting a wide variety of industries.

Read the Duane Morris Alert on the most significant changes stemming from the White House’s AI executive order.

EO: Safe, Secure and Trustworthy Artificial Intelligence

On October 30, 2023, President Joe Biden signed the new Executive Order on Safe, Secure and Trustworthy Artificial Intelligence. The order is built on previous AI initiatives based on voluntary commitments the White House secured from leading AI companies and represents the first major binding government action on the technology. As such, the executive order depicts the latest U.S. government efforts in monitoring and regulating the risks of AI while also harnessing its potential in the economic, national security and social spheres.

Read the full Alert on the Duane Morris 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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