McAfee Hit with Class Action Over Automatic Renewal Pricing

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On Jan. 10, McAfee Inc. was hit with a class action lawsuit alleging it charges customers who enroll in its automatic renewal program higher prices than it charges other customers for identical products.

McAfee markets and sells subscriptions to its anti-virus software products, promising that its anti-virus programs will protect customers’ computers from hackers, computer viruses and other computer problems. It offers subscriptions under the names of McAfee AntiVirus Plus, McAfee Internet Security, and McAfee Total Protection.

McAfee software can be purchased directly from McAfee’s website or from retailers such as Wal-Mart, Office Depot or Amazon.com. Some users sign up for a free trial period for the software, and once the trial period expires, McAfee strongly encourages the users to purchase a paid subscription to the software.

According to the McAfee class action lawsuit, consumers who purchase a one-year subscription to McAfee software are automatically enrolled in the auto-renewal program, and McAfee charges the subscription fee to the customer’s credit card on file. The annual renewals continue each year, as long as a customer remains enrolled in the auto-renewal program.

“McAfee induces customers to enroll in its Auto-Renewal program by representing that the cost to automatically renew their McAfee anti-virus software subscriptions will be no more than McAfee’s normal, then-current price charged to other customers for the same products,” the McAfee class action lawsuit alleges.

However, McAfee allegedly charges auto-renewal customers more than it charges other customers for the same products, according to the McAfee auto-renewal class action lawsuit.

“For years, McAfee has consistently promised and reassured customers that under Auto-Renewal, their subscriptions will be automatically renewed at a price no higher than the normal, then-current price that McAfee charges other customers for the same software,” the McAfee class action lawsuit alleges.

“These representations and promises, which are made expressly in McAfee’s standardized Consumer Agreement and reinforced on McAfee’s website and elsewhere, are specifically designed by McAfee to lull customers into enrolling and remaining enrolled in the Auto-Renewal program.”

Plaintiff Sam Williamson alleges in the class action lawsuit that these representations are false because McAfee systematically charges auto-renewal customers a higher price than the current price the company charges other customers for the same products.

For example, Williamson alleges that customers who were enrolled in the auto-renew program for the McAfee AntiVirus Plus subscription and had their subscriptions auto-renewed on Jan. 1, 2014 would have been automatically charged $49.99 for a renewed one-year subscription. On the same day, McAfee offered other customers the same one-year McAfee AntiVirus Plus subscription for the lower price of $34.99, the McAfee class action lawsuit alleges.

Further, the McAfee auto-renewal class action lawsuit argues that the auto-renewal prices are not only higher than the prices McAfee charges other customers, but they are also higher than the Manufacturer’s Suggested Retail Prices (MSRPs) that McAfee sets for retailers.

By filing the McAfee auto-renewal class action lawsuit, Williamson seeks to represent a Class of consumers who incurred charges from McAfee for the automatic renewal of the following McAfee-branded products: McAfee AntiVirus Plus, McAfee Internet Security, and/or McAfee Total Protection. He also seeks to certify a Class of consumers who purchased or manually renewed McAfee software advertised as discounted from a represented former sales price.

Williamson is represented by Michael W. Sobol, Roger N. Heller and Nicole D. Sugnet of Lieff Cabraser Heimann & Bernstein LLP and Daniel M. Hattis of Hattis Law.

The McAfee Auto-Renewal Class Action Lawsuit is Sam Williamson v. McAfee Inc., Case No. 5:14-cv-00158-EJD, in the U.S. District Court for the Northern District of California.

UPDATE: On July 14, 2016, McAfee Inc. reportedly agreed to pay $80 million to resolve a class action lawsuit alleging it automatically renewed customers’ security software subscriptions at a higher price than promised.

UPDATE 2: The McAfee automatic renewal pricing class action settlement is now open! Click here to file a claim.