Green Light Given to Customer Lawsuit Over Peloton’s Business Practices

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An federal judge from New York has allowed a class action lawsuit to be filed against Peloton due to its business practices that are allegedly fraudulent.

Peloton sells premium indoor exercise bikes. They require that users subscribe to a monthly service which includes live streaming and online cycling classes. Classes on demand are an important part of the Pelaton services, and provide a range of songs that are popular to help participants during their workouts. The COVID outbreak began at the beginning of the year when gyms were shut down and people being confined to their residences, Pelaton experienced a huge rise in sales.

In the year 2019, a consortium of 10 music publishing companies which are members of the National Music Publishers Association (NMPA) brought a suit against Pelaton in the amount of $150 million, alleging that Pelaton had violated copyrights when it used more than 1,000 of their tracks in its fitness classes streaming on its website without proper licensing. The publishers then increased their claim up to $370 million. In the retaliation, Peloton filed a counterclaim and claimed that the NMPA was in violation of antitrust laws by organizing its members’ publishers to discuss licensing. This counterclaim was rejected January 2020. In the following months, the parties declared that they had reached an agreement to settle the case for an undetermined amount,


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Following the time that Peloton has been accused of violating more than 1,000 songs, the company did not take down from its catalog every class on-demand that contained suspected songs. Based on the huge number of songs being accused it resulted in an extensive amount of classes being removed. Plaintiffs of the lawsuit allege that Pelaton was guilty of deceitful business practices due to the fact that it didn’t inform its customers that it was removing the entire class and instead, continued to promote its library with no change in price. Plaintiffs claim that Pelaton was a fraud to its subscribers due to the fact that it was aware of or ought to be aware that its subscribers expected access to the complete library of classes at the time they joined.

In a bid to dismiss the case, Pelaton argued that the plaintiffs were unable to demonstrate that they relied on the claims regarding its on-demand class library when they bought its bicycles and services for subscription. But, the judge decided that the plaintiff’s trust was not necessary for the case to be considered, and the court should instead look at the impact the Pelaton’s claims affected the market overall in assessing the plaintiffs’ damages.

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