It’s hard to overstate TikTok’s impact on fashion and beauty trends and social commerce, or the impact of AI on nearly every aspect of retail. So on Wednesday, when both faced pivotal new challenges across two continents, the brands began preparing for what could have a huge impact.
The House of Representatives has passed a bill forcing social media supernetwork TikTok to separate from its owner, China-based ByteDance, or have the app banned in the United States. national security concerns; These are the same concerns voiced by the previous Trump administration that nearly forced the company to sell the platform four years ago. President Joe Biden has promised to sign the agreement if it is approved in the Senate. At this point, TikTok will have five months to find a new owner.
More from WWD
Meanwhile, on the same day, the EU adopted an important law regulating the development and use of artificial intelligence. The Artificial Intelligence Act, first proposed in 2021, sets guardrails that would justify banning the technology based on risk levels from low, medium and high to “unacceptable.”
“Artificial intelligence is already a big part of our daily lives. “It will now be part of our legislation,” said European Parliament President Roberta Metsola in her social media post.
The EU Artificial Intelligence Law has not yet fully matured…
The EU AI Law is essentially similar to the EU’s 2016 GDPR (or General Data Protection Regulation); It aims to protect consumers from bad technology policies, albeit aimed at artificial intelligence rather than personal data. According to its text, it aims to protect and promote “the adoption of human-centered and trustworthy artificial intelligence,” a noble goal that has proven to be so popular; The regulation was voted on by a large majority of 523 in favour, with only 46 against. It even has fans from the tech industry.
Of course it is. The need for guardrails for such a complex, powerful and fast-growing technology is indisputable. But this also means that implementation is no simple task. In fact, it already looks complicated, perhaps even messy. The scope covers many aspects of AI and extends beyond the creators and developers of AI to the partner companies that use their tools. This leaves companies operating in Europe scrambling to understand what compliance means.
The law lays out a range of bans, from the use of artificial intelligence for biometric identification to social scoring and artificial intelligence-based manipulative techniques. There are obvious violations, such as deepfakes used for disinformation or facial recognition used for discrimination. But many other scenarios can plague even well-intentioned people and companies.
Fashion retailers may find that they need to explain the use of AI-generated models in a marketing campaign. So would a beauty brand be prohibited from targeting users based on data obtained from a virtual makeover or face-scanning skincare app? Or are you ranking their value as a customer for loyalty purposes? If AI is used to scan customer histories and categorize types of shoppers to offer product and size recommendations, would that violate the law? As for the essence of such specific use cases, it is not immediately obvious.
The EU Artificial Intelligence Law will come into force in May, but it will look like a rollout over time rather than a single launch, with different phases of the law being fine-tuned and rolled out over the next two years. No matter what this looks like for developers, platforms, and the brands they partner with, the consequences of getting anything wrong are pretty harsh.
Fines range from 15 million euros, or 3 percent of annual global turnover, to 35 million euros, or 7 percent of turnover. Companies won’t be able to sweep violations under the rug, either: The law also establishes the right of consumers to file complaints against businesses about improper use of AI and demand transparency in all AI-based decision-making processes that affect their rights.
TikTok’s countdown clock is ticking once again
As tech manufacturers and brands grapple with the EU Artificial Intelligence Act in Europe, companies and creators in the US are ignoring the potential of losing a tech platform that, for some, has become central to their business. Again.
Despite trying to push a similar tough line against TikTok four years ago, former President Donald Trump appeared to change course recently, with comments suggesting that banning the app would mainly benefit Meta, the “enemy of the people.” The parliament nevertheless passed the bill, bringing the ban back into the realm of possibility.
Chief executive Shou Chew has reacted to the rapidly escalating TikTok conundrum regarding X, the app formerly known as Twitter, stating that the action will “take billions of dollars out of the pockets of creators and small businesses.”
He’s not wrong.
The fact that TikTok has more than 170 million U.S. users demonstrates its enormous influence — and if anyone missed the memo, perhaps they caught word of the anxious messages flooding lawmakers’ offices facilitated by the company itself. The TikTok app urged users to contact their representatives directly and file a complaint.
That wasn’t enough for some stars and fans who gathered in Washington, D.C. this week to defend the practice. This was the setting for another TikTok gambit. The company reportedly paid some creators to participate in the protest and announce it to their followers, reaching a total of approximately 60 million followers.
It is not yet known whether the company’s tactics will work. What’s clear is that the stakes are high, and not just for TikTok. Brands are also big on the app, whether through the TikTok Shop, various accounts, or creator partnerships.
The company had nearly 5 million business accounts as of last year; Among them were Crocs, PrettyLittleThing, PacSun, Asos, Ugg, Vans, Converse, Calvin Klein, Boohoo, Ralph Lauren and many more familiar names. Although some experts wonder aloud whether the app’s massive influence on fashion retail is starting to wane, it still seems to be shining bright in terms of trend setting and inspiration. Just ask Prada. It looks like the fashion house took inspiration from TikTok’s coquette trend for its show at Milan Fashion Week.
But some of the businesses that stand to lose the most are smaller companies. Like Juicy Body Goddess Boutique.
Owner Summer Lucille told CNN in an on-air segment that her store in Charlotte, N.C., has grown into a 15,000-square-foot warehouse and brick-and-mortar mall location since she started promoting it on TikTok two years ago. The experience is similar to that of Jessie Whittington of Ramsey Springs, Miss., who turned her soap-making hobby into a business on the platform called Country Lather Soap Works. “TikTok is a great platform for DIY,” he said in a highlight of the app. This is the stuff of dreams and TV commercials.
For Lucille, the possibility of a TikTok ban seems like a nightmare. The fate of the app and itself is in the hands of the Senate. His message to lawmakers: “You’re voting against my small business,” he said on air. “You’re voting against me having a slice of my American pie.”
The best of WWD