Anthropic Must Face Claims Its Claude Max Usage Promises Misled Subscribers

Magistrate Judge Alex Tse of the US District Court for the Northern District of California let claims of negligent misrepresentation and breach of contract proceed in Kahn v. Anthropic, along with one plaintiff's claim under a state consumer protection law, according to reporting on the November 6 order. He dismissed other claims, including two brought under California's unfair competition and false advertising statutes.

The case goes to the heart of how AI companies sell access to their models. Subscription tiers sold on a multiple of usage are now standard across the industry, and the plaintiffs argue that the multiple Anthropic advertised did not hold over the period customers were paying for. The ruling is not a finding that Anthropic misled anyone, and no class has been certified, but it means the company now has to litigate the claims rather than have them thrown out at the outset.

The plaintiffs, Karl Kahn and Solomon Smith, sued in June. They take issue with Anthropic's promise that its $100 and $200 a month Max plans offered "5x or 20x more usage" than the cheaper Pro plan. The multiples applied to each five-hour session, but weekly limits were not raised by the same factor, the plaintiffs say. By their own calculations for one Claude model, the $200 plan delivered about six times Pro's weekly usage and the $100 plan about 3.5 times. Those figures are the plaintiffs' estimates, not findings by the court.

Anthropic argued that a reasonable customer would understand the promise as applying per session, and pointed to an explanation on a help page. The judge was not persuaded at this stage. He wrote that the per-session disclosure "is located two hyperlinks away from the primary sales pages on claude.com," according to Courthouse News, and reasoned that because customers pay by the month, they could reasonably read the promise as covering each month. "The advertising in question is plausibly misleading," Tse wrote, according to the technology site Glitchwire.

The breach of contract claim survived partly because Anthropic's terms of service direct customers to the order process for subscription details, which the judge found could make the sales pages part of the contract, Glitchwire reported.

The plaintiffs did not win everything. Tse rejected the argument that Anthropic acted unfairly by tightening usage limits partway through billing periods. He also found that because Kahn and Smith are still subscribers, they had not shown they could seek a court order forcing Anthropic to change its marketing, so no injunction is in play. Kahn's consumer protection claim was dismissed with permission to refile with more detail.

The ruling comes shortly after Anthropic changed the names of its tiers. About nine days before the order, the plan formerly called Max 5x became simply Max and Max 20x became Ultra, with prices unchanged, according to Glitchwire. The lawsuit concerns the earlier names and advertising. It is not known whether the change was connected to the litigation.

Anthropic and lawyers for the plaintiffs did not respond to Courthouse News's requests for comment. The case is moving forward as Anthropic prepares for a public listing, and the plaintiffs have until December 2 to file an amended complaint. If they do not, Anthropic must answer the surviving claims by December 16.