Peloton is once again in the news – and not in a good way – as the lawsuit accusing them of Invasion of Privacy under California Law is permitted to proceed. 

Class Action Filed by Julie Jones

Plaintiff Julie Jones filed a class action in the Southern District of California against Peloton Interactive, alleging violations of its website users’ privacy. 

Use of Third-Party Software “Drift”

The basis of the lawsuit is that Peloton’s website has embedded in its chat feature third party software called “Drift” that is embedded in the website chat feature. Drift creates transcripts of the chats that users have with Peloton representatives while the communications are happening.  

Lack of User Awareness

Website users are not informed that Drift is intercepting the communications and thus, according to the lawsuit, they believe they are communicating directly with a Peloton representative. 

Data Collection and Usage by Drift

Drift interprets, analyzes, stores and uses the data  for various purposes.  The full transcript of the conversation, date and time the conversation began, IP address of the visitor, web browser used to access the Website, the device that was used and the specific words that were used to route the visitor to a particular Peloton representative are all collected by Drift and used to improve its AI.  

Initial and Amended Complaints

The initial complaint was filed on June 9, 2023 alleging numerous violations, and on August 16, 2023, Peloton filed a motion to dismiss the complaint which was granted by the court.  Jones then filed an amended complaint solely alleging a violation of the California Invasion of Privacy Act, which imposes both civil and criminal liabilities.  Civil remedies include a possible recovery of $5,000 for each violation and potentially treble damages, and criminal penalties include monetary fines and even jail time up to three years in a county jail.   A big question in these cases involves whether an individual reasonably expects to be overheard by someone else or recorded.  

Peloton’s Motion to Dismiss and Court’s Ruling

Peloton filed a motion to dismiss the amended complaint, alleging that the facts alleged in the complaint weren’t sufficient to state a cause of action under the statute. Peloton argued that 

Since it is a party to the initial communications and Drift is merely providing a tool to allow Peloton to record and analyze its own data, Drift is not a  “third party eavesdropper.”  The court disagreed, ruling that since Drift uses the information to improve the capability of its own  AI software, it is intercepting chats for its own use, not just Peloton’s.

Future of the Lawsuit

Therefore, this lawsuit will continue, and the case will be decided on its merits.  We’ll update you when we have more information on the next phase of this litigation. 

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