Music Publishers Deal Small Blow to Peloton as Judge Dismisses Antitrust Claim

By Shirley Halperin

LOS ANGELES (Variety.com) – The ongoing legal showdown between Peloton and music publishers dealt a small but important blow to the exercise bike company. On Wednesday, a federal judge shot down a counterclaim filed by alleging that the trade group had conspired to interfere in their discussions with various publishing companies. Underlying the case is the notion that Peloton, in not properly licensing all of the music played on its exercise streaming platform, had committed copyright infringement.

Publishers including Downtown Music, Big Deal Music, Peer and its affiliates, among many others, first filed suit in March 2018 accusing Peloton Interactive Inc. of using unlicensed music in its classes which were streamed to exercisers via a paid subscription. Peloton filed a counterclaim alleging that the National Music Publishers Association (NMPA) violated antitrust law in organizing publishers to band together and encouraging them to turn down license requests.

Presiding U.S. District Judge Denise Cote of the Southern District of New York (Manhattan) didn’t disagree with the antitrust allegations, writing “when Peloton … attempted bilateral discussions with several Music Publishers, including ole, Reservoir, and Downtown, those Music Publishers cut off the discussions simultaneously and abruptly.” But she also noted that Peloton could have substituted the music  or songs that were cleared for use.

Cote dismissed Peloton’s counterclaims.

Said president and CEO David Israelite following the ruling: “Today’s victory is a reminder that tech companies like Peloton cannot build businesses that are reliant on songwriters without asking their permission and paying them. Judge Cote has dismissed all of Peloton’s counterclaims which were only meant to distract from their failure to license 2468 songs. We are pleased that Peloton’s attempts to divert attention from the heart of the issue – properly paying creators for the music on which its billion-dollar business was built – have been defeated.”

In a statement, a rep for Peloton said, “We respectfully disagree with this ruling regarding our counterclaims and are assessing our options for appeal. We will continue to vigorously contest the plaintiff publishers’ infringement claims, which were not addressed in this decision.”