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Aug 11, 2022

Peloton loses bid to toss consumer lawsuit over workout classes

Peloton to stop in-house production

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Peloton Interactive Inc. lost a bid to throw out a lawsuit by consumers alleging they overpaid for a subscription to the company’s digital fitness classes because almost half of the offerings were removed due to a copyright dispute.

More than a dozen music publishers sued Peloton in 2019, seeking US$150 million in damages on claims the company hadn’t obtained appropriate licenses to use music for workout videos on its subscription service. While Peloton settled with the publishers in February 2020, it’s still battling the lawsuit by consumers.

On Thursday, US District Judge Lewis J. Liman in New York denied Peloton’s request to dismiss the suit. The judge rejected the argument that the consumers weren’t aware Peloton was misleading them about the amount of its content before they bought their devices and didn’t rely on its statements when making a purchase.

“Just as the consumer who purchases a pen whose price is inflated by the false characterization of it as being rugged is injured as a result of the misrepresentation to the market even if he personally is oblivious to it, so too the consumer who purchases a Peloton subscription whose price is inflated as a result of a false marketing campaign suffers an injury traceable to that campaign even if the misrepresented fact was not important to her,” Liman said.

A spokesperson for the company didn’t immediately respond to a request for comment.

Peloton’s bikes and treadmills come with screens that let users watch classes and select music. The company relies heavily on its patents, trademarks and copyrighted material to charge a premium and separate itself from competitors. The company last month announced plans to cease in-house manufacturing and rely solely on partners for production after growth stalled dramatically following a boom during the pandemic. 

The case is Fishon v Peloton Interactive Inc., 19-cv-11711, US District Court, Southern District of New York (Manhattan.)