The trade association for music publishers denies accusations of anti-competitive activity by the exercise-bike manufacturer.
Over a dozen music publishers involved in a $150 million copyright infringement lawsuit against exercise-bike manufacturer Peloton are denying that they conspired with the trade organization National Music Publishers Assn (NMPA) to collude against the company, according to documents filed in New York federal court on Monday (June 24).
Monday’s filing is the latest development in the ongoing legal tussle between the independent publishers and Peloton, which manufactures exercise bikes with built-in touchscreens through which thousands of instructor-led classes -- most of which include curated song playlists -- can be streamed. In their original lawsuit filed back in March, the publishers alleged that Peloton had willfully infringed their copyrights by using over 1,000 copyrighted musical compositions without obtaining the necessary sync licenses.
Peloton responded to that lawsuit in April by filing a counter-claim against the publishers, alleging that they had engaged in anti-competitive behavior by teaming up against the company in "a coordinated effort...to fix prices and to engage in a concerted refusal to deal with Peloton." They also accused the NMPA of “tortious interference” that prevented Peloton from making deals with the individual publishers, which include Downtown Music Publishing, Pulse Music Publishing, ole, peermusic, Ultra Music, Big Deal Music, Reservoir, Round Hill, TRO Essex Music Group and The Royalty Network.
The Monday filing, a motion to dismiss Peloton’s counterclaim, accuses Peloton of resorting to the “timeworn tactic of asserting a baseless antitrust counterclaim" against the publishers in response to their original suit. They allege that Peloton’s counterclaim fails to establish either collusion on the part of the publishers or interference on the part of the NMPA and should therefore “be dismissed in their entirety with prejudice.”
A cornerstone of the publishers’ argument against Peloton's claims of collusion comes from the Noerr-Pennington doctrine, which immunizes businesses against anti-trust liability when filing good faith lawsuits against competitors.
“Under the Noerr-Pennington doctrine, the plaintiffs have the right to join together to prosecute their claims of copyright infringement, even if such conduct could be considered anticompetitive, as long as the litigation is not a ‘sham,’” reads the June 24 motion.
“Beyond the allegation that the ‘Coordinating Publishers’ all cut off negotiations at the same time, Peloton has alleged no facts circumstantially raising an inference of collusion,” the motion continues. “It focuses on the ‘Coordinating Publishers’’ participation in the same trade association…but mere participation in trade associations and industry events is not, by itself, evidence of collusion.”
Peloton’s claims of antitrust activity are additionally disputed by the publishers on the grounds that Peloton has failed to establish that its streaming service is dependent upon the musical compositions that are owned either in whole or in part by the publishers.
"Peloton makes no allegation showing plausibly why the rights owned by the 'Coordinating Publishers' -- each an independent publisher not affiliated with a major record label -- are not substitutable for rights owned by other publishers, including the major and independent publishers with whom Peloton has licenses," the motion reads.
The motion additionally disputes Peloton's "tortious interference" claim by stating that because the NMPA was motivated by the economic interests of its member companies and not solely by the intention of inflicting harm on Peloton, its conduct “cannot constitute intentional infliction of harm” under New York law “unless it is fraudulent or criminal.” It additionally claims that Peloton failed to "identify a single license agreement with any of the Publishers that it ‘would have entered into’ but for NMPA’s conduct."
The NMPA further points to the agreements Peloton has reached with publishers “who had initially been a part of the group NMPA had purportedly represented” to undercut its argument that the NMPA placed “extreme and unfair economic pressure” on music publishers not to sign individual deals.
Music allegedly used without permission by Peloton includes songs by such artists as Rihanna, Bruno Mars, Lady Gaga, Katy Perry, Justin Timberlake, Shawn Mendes, Ed Sheeran, Wiz Khalifa, Thomas Rhett, Ariana Grande, Justin Bieber, Florida Georgia Line, Drake, Gwen Stefani and more.
Peloton, which offers its subscribers access to a library of over 13,000 workout videos, was recently valued at $4 billion. The company claims that it has entered into license agreements with -- and is paying -- all “major” publishers, several independent publishers and every performing rights organization that represents the songwriters and publishers whose music is featured in the company’s videos.
Shortly after the original lawsuit was filed, Peloton began removing videos featuring songs named in the filing “out of an abundance of caution," according to Peloton founder and CEO John Foley.
After the counterclaim was filed, NMPA executive vp and general counsel Danielle Aguirre told Billboard, “Peloton’s countersuit has no merit and is an attempt to divert attention from the fact that it has been operating without sufficient licenses for years in order to build its multibillion dollar business. The NMPA routinely defends the interests of its members’ copyrights in order to protect their value, prevent future infringement and to seek damages to which they are entitled under the law when their property has been stolen. Peloton’s countersuit is further evidence that it does not value its relationship with the music industry but is instead hostile to the people without which it could not have built its thriving business. We will continue to fight for the rights of music creators until they are paid what they deserve.”
Billboard reached out to the NMPA and Peloton for additional comment but had not heard back as of press time.