Peloton is putting an end to its legal dispute with authorities over Tread Plus safety concerns after agreeing to pay the Consumer Product Safety Commission a little over $19 million.
The penalty settles accusations that the business "knowingly failed to immediately report" flaws with its Tread Plus treadmill to the US authorities, CPSC says in a statement.
The Company Says It Is Willing To Cooperate With The Commission
As early as December 2018, the business began receiving reports of individuals, animals, and things being pulled beneath the Tread Plus.
However, according to the Commission, the fitness equipment maker did not immediately disclose these cases as required by law.
Over 150 incidents were documented by the time Peloton submitted a report, among them the death of a kid and 13 injuries.
Because of that, in addition to the payment, the agreement calls for Peloton to implement a compliance program and provide annual reports.
A spokeswoman for Peloton told Engadget that the company was "pleased" to reach a settlement with the CPSC and that it will work with them to enhance product security.
The official continued by saying that the business was still looking for permission to build on Tread Plus safety features with a rear guard.
More than a year after a heated public debate over the Tread Plus design, a compromise has been reached.
It can be remembered that following complaints of accidents, the CPSC issued a warning against using the treadmill.
However, Peloton stated that clients could still use the exercise equipment as long as they followed instructions and called the alert "inaccurate and misleading."
Weeks later, the business decided to voluntarily recall its hardware, but only after 72 occurrences had been documented up until that point.
Read More: Peloton Parts Ways with Co-founders, Will Offer Netflix-like Personalization Under New Leadership
Peloton's Shares Have Been Going Down Since
Former CEO John Foley said in May that Peloton erred in its initial response to the CPSC's request, saying that the company should have engaged with the Commission more productively.
According to CNN Business, the manufacturer of exercise equipment, which experienced tremendous sales growth at the height of the pandemic, has since encountered a number of issues.
Because of this, the company reacted by changing its management and making significant workforce and operational reductions.
Following the CPSC news, shares of Peloton Interactive Inc (PTON) plunged, dropping from a high of over $167 in January 2021 to roughly $8 in after-hours trade.
Additionally, the brand had a poor year in 2022 with declining sales as potential consumers went to the gym or otherwise ventured outside during the pandemic recovery.
It used a variety of strategies, such as machine price reductions and a shift to third-party manufacture, in an effort to reduce expenses and increase sales, Engadget reports.
The settlement puts a stop to the possibility of further legal issues and frees Peloton to concentrate on growing its business, maybe including the eventual reintroduction of the Tread Plus.
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