T-Mobile hit back at Verizon on Monday in Manhattan federal court, filing a countersuit that accuses Verizon’s “Better Deal” campaign of luring customers into stores with promises of big savings and then steering them toward pricier add-ons. What started as a marketing spat has now turned into a full-on legal fight over whether in-store upselling crosses the line into deceptive advertising.
The countersuit says Verizon’s “better deal” pitch is a ruse that pulls consumers in with false savings and then tries to upsell them. T-Mobile is asking a judge to halt the ads and award triple damages under the federal Lanham Act, along with relief under New York’s unfair competition laws, according to Reuters. T-Mobile frames the action as a direct response to advertising and retail tactics it says mislead shoppers and hurt competition.
Ad watchdog had already flagged T-Mobile
The clash lands on top of a longer-running industry review. The National Advertising Review Board previously recommended that T-Mobile stop making broad savings claims and later concluded that the carrier failed to bring its advertising into compliance. The NARB panel found that T-Mobile’s disclaimers were not clear enough to alert reasonable consumers that its savings comparisons relied in part on optional streaming and other third-party benefits. BBB National Programs’ NARB has been central to the back-and-forth among competitors and self-regulators over how far these savings claims can go.
Verizon’s original complaint
Verizon drew first blood in early February, suing T-Mobile and accusing it of exaggerating potential savings, in some examples by more than 100 percent, by comparing promotional pricing with Verizon’s standard, non-discounted rates and by folding the value of optional add-ons into headline savings claims. That suit seeks to halt the challenged ads and to recover damages for false advertising and unfair competition. Investing.com reported on Verizon’s February filing and the allegations laid out in the complaint.
Legal implications
Both carriers are asking for injunctive relief and money damages, pulling familiar false-advertising and competitive-injury standards into the spotlight. Under the Lanham Act, a competitor can seek an injunction and damages if it shows that misleading commercial statements are likely to deceive customers and harm the plaintiff’s commercial interests. For a rundown of those standards and remedies, see Cornell Law School’s LII.
Now it will be up to the courts to parse not only the fine print in the ads and disclaimers but also how the sales pitch plays out in stores and on kiosks, which sits at the heart of T-Mobile’s claim that Verizon steered customers toward higher-cost products. Expect early rounds of briefing over whether any of the ads should be put on ice while the larger litigation rumbles on.
