Anthropic must face claims its Claude Max pitch misled users

A federal judge said customers could reasonably read Anthropic’s promise of “5x or 20x more usage” as applying monthly.(CN) — Anthropic’s promise of “5x or 20x more usage” for its Claude Max plans could mislead customers, a federal judge in California said Friday.U.S. Magistrate Judge Alex Tse dismissed several claims but allowed key parts of a proposed class action by Claude users to move forward.“The advertising in question is plausibly misleading,” Tse wrote.Anthropic offers four tiers of its large language model series Claude: a free plan, Pro for $17 to $20 a month, Max 5x for $100 and Max 20x for $200. Its website promises Max subscribers “5x more usage than Pro” or “20x more usage than Pro.”But Karl Kahn and Solomon Smith, who sued on behalf of Claude Max customers, say the plans deliver far less than those promises over a full week.For one Claude model, they calculated that Max 20x users get six times Pro’s weekly usage, while Max 5x users get 3.5 times.The difference comes down to usage limits. Max subscribers can use Claude five or 20 times more during each five-hour session, but their weekly limits are not five or 20 times higher than Pro’s, Tse said. Some customers were frustrated to find their weekly usage running out quickly.“I am only on my third day of the week, and I have already used 50% of my weekly allowance on the 20x Max plan,” one customer said.Anthropic argued that customers should understand “more usage” to mean more usage per session, pointing to a help page that explains the limits. Tse was not persuaded.“Anthropic’s per session disclosure is located two hyperlinks away from the primary sales pages on claude.com,” he said.Customers did not need to visit that page to sign up, Tse said. The plaintiffs compared the disclosure to fine print on the back of a shampoo bottle. Such information may help Anthropic defend its advertising later, but it was not enough to dismiss the case at this early stage, he wrote.Because customers pay monthly, Tse found they could reasonably understand the promise to mean five or 20 times more usage each month. An asterisk on one sales page says “Usage limits apply,” but does not mention per-session limits.The ruling split the two plaintiffs on their claims under California’s Consumers Legal Remedies Act, a law protecting consumers from deceptive business practices. The law covers purchases for personal, family or household use.Tse found that Claude Code, the coding tool included with paid plans, could qualify as a service under the law.Smith’s claim survived. A computer science student, he uses Claude for coursework, coding projects and an IBM-sponsored hackathon. Tse agreed that educational use does not amount to commercial use.But Kahn’s claim did not. He said only that he uses Claude Code “to accomplish computer programming tasks,” without explaining what those tasks involve. Tse dismissed his claim but gave him a chance to provide more details.“He could be an entrepreneur who uses Claude Code to develop software for sale,” Tse said.Claims under two other California laws covering unfair business practices and false advertising were also dismissed. Because the plaintiffs remain subscribers despite knowing about the disputed advertising, Tse found they had not shown they could seek a court order requiring Anthropic to change its marketing. They also didn’t explain why monetary damages would not be enough.The plaintiffs can continue with claims that Anthropic negligently misrepresented its plans and broke its subscription agreements. Tse found that the contracts could include the sales pages because Anthropic’s terms point customers to “the order process” for details about their subscriptions.Tse also dismissed a claim that Anthropic broke its duty to treat customers fairly by changing usage limits during billing periods. The company’s terms allow it to change capacity limits, and Max subscribers still get more weekly usage than Pro users and retain access to Claude Code, he said.“Anthropic didn’t tighten usage limits as a bait-and-switch,” Tse said.Representatives for Anthropic and the plaintiffs didn’t immediately respond to a request for comment.Subscribe to our free newslettersOur weekly newsletter Closing Arguments offers the latest about ongoing trials, major litigation and rulings in courthouses around the U.S. and the world, while the monthly Under the Lights dishes the legal dirt from Hollywood, sports, Big Tech and the arts.Additional Reads