Estée Lauder pleads guilty to Canada PFAS violation amid US tech lawsuit

Estée Lauder is currently facing legal pressure on two fronts — a violation of PFAS regulations in Canada and a separate civil lawsuit in the US. 

In Canada, an Ontario court has fined Estée Lauder Cosmetics (ELC) CA$750,000 (US$548,850) after the company pleaded guilty to violating the Canadian Environmental Protection Act (CEPA). The company was found to use perfluorononyl dimethicone, a silicone polymer classified as a per- and polyfluoroalkyl substance (PFAS), in some of its eyeliner products.

PFAS are often referred to as “forever chemicals” because they do not break down easily in the environment. The group of chemicals has seen increased regulatory attention as of late, especially regarding their safety. Some federal bodies, such as the US FDA, say available data is insufficient to determine their safety in cosmetics, while others have placed bans on the chemicals’ use in beauty products.

Under CEPA, using perfluorononyl dimethicone in cosmetics is classified as a Significant New Activity (SNAc). Under the rule, companies intending to sell a product containing the ingredient must notify the government. Regulators then assess the product’s potential environmental or health risks before it can be placed on the market.

Estée Lauder pleaded guilty to failing to notify authorities about the SNAc and non-compliance with a government order to correct the issue.

Canadian conviction

Mounting scientific evidence has linked PFAS to thyroid dysfunction, decreased immune response, and increased cholesterol levels. Some studies suggest an association between PFAS and kidney and testicular cancers.

Enforcement officers from Environment and Climate Change Canada (ECCC) found perfluorononyl dimethicone, a PFAS chemical, in some of Estée Lauder’s eyeliner products during a routine inspection approximately three years before the current conviction.

According to ECCC, cosmetic manufacturers use the ingredient to improve product durability. However, in June 2022, Cosmetics Alliance Canada (CAC) informed its members that the ingredient required disclosure under the SNAc framework.

A year later, on June 8, 2023, enforcement officers issued a compliance order outlining the steps Estée Lauder needed to take to comply with CEPA for its use of the ingredient.

Some ELC eyeliners have been found to contain PFAS, a group of persistent chemicals linked to potential health and environmental concerns.In the current case, the court found that Estée Lauder failed to notify and comply with the Canadian government’s compliance rules.

After pleading guilty, the beauty company must pay the fine to the Environmental Damages Fund (EDF) and must also notify its shareholders of the ruling. The company’s name will, as a result, be added to Canada’s Environmental Offenders registry.

Tit-for-tat tech

Across the border, Estée Lauder is facing a civil lawsuit filed in New York, US, by technology start-up Nomi Beauty. Nomi claims it developed proprietary technology to help beauty brands understand consumer purchasing behavior. It shared the technology with Estée Lauder, aiming to support the company’s sales in luxury hotels, duty-free locations, and in-room retail services.

According to the lawsuit, Estée Lauder ended its contracts with Nomi in 2018 and 2020 and went on to launch similar sales programs in multiple countries.

The filing alleges that the programs relied on confidential information Nomi shared during the partnership. Nomi also claims Estée Lauder cut off product supply to hotels working with the tech company, which subsequently made it impossible for Nomi to continue its business operations.

Reuters reports that Nomi seeks unspecified compensatory, punitive, and triple damages. The tech company’s legal representatives say Nomi’s innovations continue to generate profit for Estée Lauder.