Cosmetics giant Estee Lauder has been sued by a beauty technology startup that claims the company stole proprietary technology and effectively drove it out of business.
In a complaint filed in Manhattan federal court, Nomi Beauty accused Estee Lauder of abandoning commercial agreements in 2018 and 2020 before allegedly using Nomi’s technology to generate billions of dollars in additional revenue. Nomi said its tools were designed to identify consumers’ actual cosmetic preferences rather than relying on stated choices, particularly targeting high-spending travelers.
According to the lawsuit, Nomi’s technology was intended to help Estee Lauder and its brands, including Clinique and MAC, expand sales through luxury hotels, duty-free outlets, and in-room purchases. This approach was aimed at reducing reliance on traditional retail stores.
Instead of honoring contracts or acquiring Nomi outright, the lawsuit alleges that Estee Lauder restricted product access for hotels working with the startup while launching similar programs across multiple countries, including China, Costa Rica, Malaysia, the United Kingdom, and the United States. Nomi claims those initiatives relied on the same trade secrets it had shared with Estee Lauder over several years.
Nomi is seeking compensatory, punitive, and triple damages, though no specific amount was disclosed. Estee Lauder did not immediately respond to requests for comment. Nomi’s attorney said the startup’s innovations helped bring the cosmetics company into a new data-driven era, arguing that Estee Lauder continues to profit from those ideas.
Both companies are based in New York. Separately, Estee Lauder has been pursuing a “Beauty Reimagined” turnaround strategy since last year, which includes supply chain changes, new product launches, and plans to cut up to 7,000 jobs to address declining sales.
