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Beaut-AI | How Regulations Will Impact the Beauty Industry
In the-post-Covid world, retailers have been working hard to improve the customer experience as the retail landscape continues to move from in-store to online. From fitness to footwear, couture to cosmetics, data analytics and artificial intelligence are the new ingredients accelerating product development and providing consumers with personalised products and services.
According to McKinsey, in 2022 the beauty market generated approximately $430 billion in revenue and is expected to reach approximately $580 billion by 2027. Amongst the factors driving this growth is the increased digital sophistication of both brands and retailers.
Customer Feedback Analysis
Mintel’s 2024 Global Beauty and Personal Care Trends reports that “AI will permeate the beauty industry in the form of personalised recommendations, virtual try-on experiences and data-driven insights.”
The report goes on to say that “By analysing social media trends, customer feedback and market research, AI will help brands identify emerging beauty preferences and eco-friendly options.
Brands Positioning In AI
In the last few years brands and retailers have been deploying an increasingly sophisticated range of tools and analytics to enhance the consumer experience. For example, the Taiwanese company Perfect Corp has an extensive range of augmented reality enabled tools.
These include virtual make up, hair colour and nail effects, as well as photograph enhancements like virtual tattoos and personalised avatars. No7 used Perfect Corp’s artificial intelligence and augmented reality technology, for its cosmetic shade matching experience and Yves Saint Laurent, L’Oréal Paris, MAC Cosmetics, and Macy’s have all used Perfect Corp technologies to offer customers virtual try-ons of clothes and cosmetic products.
In 2018, L’Oreal acquired ModiFace and used its technologies for an AI makeup app with augmented reality in cooperation with Facebook. With Modiface technology customers use a smartphone camera ‘try on’ products virtually and then move to the product page to make a purchase.
In 2019, Coty released Wella Professionals AR enabled smart mirror for hair salons. Combining AR, facial recognition and 360° video capture that works in salon and on smartphones, Wella customers can retrieve past hair styles and view their hair at every angle in their smart mirror, creating a highly personalised customer experience.
DeepAR‘s augmented reality and emotional detection tools are being used by customers for virtual try-ons of Ray-bans sunglasses and Allbirds footwear, virtual make up by Lush and Sephora as well as augmented reality advertising. It teamed up recently with Sky to integrate AR to the Sky Glass TV using body-tracking software to deliver an AR experience for casual games, and fitness applications at room-scale.
Risks Of AI Implementation
Whilst Beaut-AI offers many benefits for brands and consumers, the collection, storage and processing of personal data, and in particular biometric data from facial recognition software is already subject to Data Privacy laws and regulations.
Companies looking to use technology in this area must guard against data breaches and misuse, ensuring that their policies include adequate customer consents to the collection and use of personal data, and in particular special category data such as biometric information. Beaut-AI will soon be subject to more rigorous and extensive regulations and policies in the EU and UK.
In the EU the use of artificial intelligence will be regulated by the AI Act, the world’s first comprehensive AI law. The new rules will establish obligations for providers and users depending on the level of risk from artificial intelligence. These will range from unacceptable risk AI systems (which are systems considered a threat to people), through to high and limited risk systems.
Unacceptable risk AI systems, such as cognitive behavioural manipulation of people or specific vulnerable groups, or social scoring people based on behaviour, socio-economic status or personal characteristics will be banned. High risk systems will have to comply with EU product legislation and certain categories of products will have to be registered on an EU database.
Limited risk AI systems will have to comply with transparency requirements that allow users to make informed decisions.
At present the UK does not intend to introduce new legislation. In the White Paper published in March 2023 the Government set out five principles underpinning its AI regulatory approach:
- Safety, security, and robustness
- Appropriate transparency and explainability
- Fairness
- Accountability and governance
- Contestability and redress.
Conclusion
As Mintel predicts “Transparency in AI systems will be crucial to building consumer trust and ensuring the disclosure of data sources and decision-making processes. Consumers will prioritise data protection and privacy by demanding customer consent and pushing brands to adhere to relevant regulations.”
Companies using AI-powered software solutions should pay close attention to the new regulatory landscape since the risk of damage to brand and reputation are moving to a whole new level.
To discuss any of the points raised in this article, please contact Marcus Rebuck or fill in the form below.
Returning Resident Visa: Important Changes from October 2023
Indefinite leave to remain not granted under the EU Settlement Scheme (EUSS) will automatically lapse if the person is outside of the UK for more than two years. (Under the EUSS scheme leave will lapse after five years and four years for certain Swiss nationals).
On the 5th October 2023 the Home Office deleted the old immigration rules relating to returning residents and introduced a new Appendix Returning Resident. At first glance it appears as though the changes are merely codification of the old rules, however there are two key changes to note.
The first change is the removal of the requirement that a person must have held indefinite leave when they last exited the UK. This change is welcomed by practitioners, as it created tricky scenarios where a clients leave had lapsed and they subsequently entered the UK as a visitor. Technically, a visit under the visit visa due to a lapse in ILR meant that they would be ineligible to apply as a returning resident. In practice, this was rarely enforced by the Home Office.
New Requirements For EUSS Applicants
There is now, however, a requirement that applicants must have maintained strong ties to the UK during their absence from the UK. Previously the Immigration Rules only required a person to have strong ties to the UK without specifying that these ties must have continued whilst being abroad. It is likely that applicants applying under the new Appendix Returning Resident, who have been absent for a significant period of time and have not had family ties or business connections to the UK.
If you or someone you know is concerned about applying under the Returning Resident rules, it is advisable to speak to a Solicitor to provide strategic advice as to preparing a case which meets surmounts recent changes to the Returning Resident Appendix.
Success Story
Our Partner, Jayesh Jethwa has acted for clients whose ILR had lapsed (often extensive) and for a range of reasons. In one instance, a client had been abroad for several years tending to her mother who was terminally unwell.
Upon the mother’s passing 27 months later, the applicant attempted to enter the UK and was refused entry. She made an application of her own volition to The Home Office which was refused on the basis that the applicant did not have strong ties to the UK.
Our lawyers provided a detailed case strategy and explored other factors including case law and Home Office guidance. It was argued that the applicant’s length of original residence in the UK was extensive.
Our lawyers argued that, but for the mother’s illness, our client would not have been absent for an extensive amount of time. Evidence as our client’s employment and her sudden resignation along with support letters were adduced. Our client’s ILR was reinstated on an expedited basis.
To discuss any of the points raised in this article, please contact Jayesh Jethwa or fill in the form below.
Approaches to the Regulation of AI
It is because of AI’s potential to change the world – for both good and bad that many feel it needs to be regulated. In May of this year, the CEO of Google Sundar Pichai said that “AI is too important not to regulate, and too important not to regulate well.”
The explosion of AI and the hype around it has led to an increasing degree of regulatory scrutiny and around the world we are seeing different approaches being taken to regulation of AI but also some commonalities in the approaches.
Watch Ann-Maree Blake‘s keynote presentation at the Consulegis conference event in Cardiff.
UK And EU’S Stance Om AI Regulation
Both the European Union and the United Kingdom have stepped up to the AI regulation plate with enthusiasm but have taken different approaches:
The EU has put forth a broad and prescriptive proposal in the AI Act which aims to regulate AI by adopting a risk-based approach that increases the compliance obligations depending on the specific use case. The UK, in turn, has decided to abstain from new legislation for the time being, relying instead on existing regulations and regulators with an AI-specific overlay.
In the EU the thinking is about “empowering people with a new generation of technologies” whereas in the UK the thinking is about “driving growth and unlocking innovation.”
How Will The EU Regulate AI?
The EU is looking to put in place what is probably the most ambitious framework in the world in terms of AI regulation.
It is very much aiming to be a global leader in AI regulation, in much the same way as it has with data protection via the GDPR.
What the EU AI Act does it that it looks at the risk of AI systems and it tries to deal with the risks in a practical way by categorising AI systems into 4 levels of risk which are: unacceptable, high, limited, and minimal or no risk.
If it is passed, it will require companies to assess AI system risks before those systems are put into use.
Companies will be required to obtain permits for high-risk AI, and provide transparency and accountability for those high risk AI systems.
How Will The UK Regulate AI?
The UK is not proposing to create umbrella legislation. Instead its approach, which is set out in a white paper published in March 2023 sets out the ambition of the UK being “the best place in the world to build, test and use AI technology”.
Broadly speaking the approach in the White Paper Establishing a pro-innovation approach to AI regulation rests on two main elements: firstly, AI principles that existing regulators (such as the ICO and the FCA (Financial Conduct Authority)) will be asked to implement, and secondly, a set of new ‘central functions’ to support this work.
Global Standards For Regulating AI
The regulation of AI is a complex and whether there will eventually be a true global standard for AI regulation remains to be seen.
However, companies should not wait until there is a clear regulatory framework in place in their jurisdiction as there are key things they can do now including:
- making sure that boards can demonstrate board-level oversight of AI risks. That involves asking the management to put AI on the agenda of board meetings to receive both management’s views and perspective from outside advisors.
- determining who is responsible for AI governance within their organisation and establish an AI committee.
- putting in place policies that govern the development and use of AI, and making sure that those policies align with the approach to regulation taken in the jurisdiction or jurisdictions which are relevant to their business.
- keeping a register of their use of AI tools and systems to understand how AI is used within their organisation.
- watching legislative and regulatory developments that apply to their business, such as the proposed EU’s AI Act and AI Liability Directive, and any new or updated guidance from UK regulators (which is expected within the next 6 to 12 months.
To discuss any of the points raised in this article, please contact Ann-Maree Blake or fill in the form below.
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