The class action claims that Peloton misled consumers about how many of its “on-demand” fitness classes it canceled after a copyright dispute.
A federal judge has found that Peloton must face a proposed class action accusing the stationary bicycle and treadmill manufacturer of misleading consumers about the “ever-growing” size of its library of on-demand fitness classes.
According to Reuters, the lawsuit relates to Peloton’s 2019 decision to eliminate more than half of its 12,000 on-demand classes, after facing music industry complaints that Peloton streamed copyrighted “workout songs” without seeking the appropriate licensing.
Consumers say that Peloton should have expected it might face some backlash from music publishers—yet kept charging full price for monthly subscriptions, which featured copyrighted songs from big-name musicians like Beyonce, Drake, and Ariana Grande.
In his 40-page decision, U.S. District Judge Lewis Liman said that New York-based consumers have sufficient standing to argue that they overpaid Peloton for workout equipment and subscription exercise services because Peloton remained silent about the “imminent” removal of its digital library.
“This purge dramatically shrunk the number of classes in Peloton’s library (the exact opposite of ‘ever-growing’), and materially diminished users’ experience,” the lawsuit said.
“Even after receiving notice via the cease-and-desist letter that Peloton was building its library of classes with infringing songs, Peloton continued to market ‘an expansive, ever-growing library of live and on-demand studio classes,’ and to refer to its subscriptions as including ‘unlimited access to a growing library of live streaming and on-demand Peloton classes,’” the lawsuit said. Nevertheless, Peloton “continued to accept subscription payments and charge full price for its subscription services notwithstanding that it knew or should have known that subscribers ‘would not be able to use the full on-demand class library because the number of on-demand classes was materially decreasing due to Peloton’s wrongful conduct,’ and knew that they ‘would necessarily not be receiving everything that Peloton represented they would receive.’”
Liman said that it was “reasonable” for consumers to interpret claims of an “ever-growing” library to mean “there would be value associated with the products that resulted in an increased price when that value was not actually there.”
Reuters reports that Peloton did not immediately respond to the media outlet’s request for comment.
Attorneys for the New York-based plaintiffs said they are “pleased with Judge Liman’s categoric denial of Peloton’s latest dismissal motion and we look forward to prosecuting our clients’ and the other class members’ claims through trial.”
Peloton, adds CBS News, has struggled to retain its market position, as many consumers have begun moving past the pandemic and resuming conventional gym memberships and workout regimens.