Peloton, the once-booming exercise equipment company, is facing a lawsuit that claims it illegally sold customer data for use in training AI systems. The company is sweating its legal trouble as a California judge has denied its attempt to dismiss the lawsuit.
The Register reports that the fitness technology giant Peloton is facing a significant legal challenge after a California judge refused to dismiss a lawsuit accusing the company of violating state privacy laws. The case, filed in June 2022 in California federal court, alleges that Peloton allowed a third-party company, Drift, to intercept and record chat conversations between Peloton representatives and customers without obtaining proper consent.
At the heart of the lawsuit is the claim that Peloton’s use of Drift’s software violated the California Invasion of Privacy Act (CIPA). According to the complaint, web chats between Peloton and its customers were first routed through Drift’s systems, which then used these conversations to improve its own AI systems. The plaintiff argues that this practice constitutes a breach of privacy, as Peloton “did not obtain visitors’ consent to either the wiretapping or sharing of their private conversations.”
This recent denial marks Peloton’s second unsuccessful attempt to have the case dismissed. In March 2023, the judge dismissed the original complaint for failure to state a claim. However, the plaintiff’s lawyers filed an amended complaint with a narrower scope, focusing specifically on one violation of CIPA – “aiding and abetting” Drift’s alleged violations of the law.
