Estee Lauder is facing a lawsuit from a small tech startup, Nomi Beauty, which accuses the cosmetics giant of stealing its technology and forcing it out of business. The case was filed in federal court in New York.
Nomi, pronounced “know me,” claims it developed tools to help beauty brands understand customer preferences, particularly for travellers in hotels. The startup says it shared its “secret sauce” with Estee Lauder to boost sales in luxury hotels, duty-free shops and in-room services.
According to the lawsuit, Estee Lauder ended its contracts with Nomi in 2018 and 2020, then used the startup’s confidential information to launch its own sales programmes in several countries, including China, Costa Rica, Malaysia, the UK and the US. Nomi also alleges that Estee Lauder cut off supplies to hotels working with the startup, making it impossible for Nomi to operate.
The startup is seeking unspecified compensatory, punitive and triple damages. “Nomi’s stolen innovations brought Estee Lauder into the information age, and Estee Lauder continues to profit from them wildly,” Nomi’s legal representatives told Reuters.
The lawsuit comes a year after Estee Lauder announced plans to cut up to 7,000 jobs as part of a cost-saving overhaul, following a $590m loss in the second quarter of 2024. The company blamed weak demand for cosmetics at airports and subdued spending in Asia.
