- Judge Lewis A. Kaplan granted Verizon a preliminary injunction to block T-Mobile’s “Save Over $1,000” ads
- The court cited “apples-to-oranges” comparisons
- T-Mobile isn’t backing down, vowing to fight for its “Better Value” ads
To hear U.S. District Judge Lewis A. Kaplan tell it, T-Mobile needs to clean up its advertising act, stat.
The judge earlier this week granted Verizon’s request for a preliminary injunction to block T-Mobile from running ads that promise $1,000 in annual savings if they switch carriers.
“T-Mobile’s ‘Save Over $1,000’ campaign necessarily implies that customers can save over $1,000 per year on a comparable plan by switching from Verizon’s Unlimited Ultimate plan to T-Mobile’s Better Value plan,” Judge Kaplan wrote. “That message is false. Instead of comparable plans side-by-side, T-Mobile engages in an apples-to-oranges comparison at every step of the way.”
Verizon released this statement after Monday’s ruling: “Facts matter. And so does truth in advertising.”
T-Mobile wholeheartedly disagreed with the preliminary ruling and vowed to vigorously defend its ads, which it is doing through a countersuit in New York.
“The challenged ads accurately and transparently show the value included in our Better Value plan that Verizon customers would have to pay extra to receive,” T-Mobile said in a statement provided to Fierce. “Setting this aside, independent data from HarrisX shows that our customers have had the lowest wireless bills compared to Verizon and AT&T over the past five years.”
Indeed, the “Save over $1000/year vs. Verizon and AT&T” was still easy to find front and center on T-Mobile's website as of this publication.
Sign of the times
Wireless carriers have sparred over truth in advertising since the dawn of the trade, but now that the industry is down to the Big 3, they’re increasingly going after one another, not just through self-regulating entities like the BBB National Programs’ National Advertising Division (NAD) and its review board, but through courts.
Judge Kaplan said the three large service providers are fiercely competing to wrest customers from each other and attract new ones. Price (or perceived price) is among the most important subjects of competition.
But T-Mobile’s “Save Over $1,000” campaign takes the cake.
He said T-Mobile’s false advertising is apparent even in its most detailed promotional material: the calculator. That’s where T-Mobile, without disclosing that it’s doing so, first compares Verizon’s nonpromotional rate of $195 per month with its own promotional rate of $140 per month.
“Comparing a nonpromotional plan to a promotional plan is akin to comparing an apple to an orange,” he said. “They simply are different things.”
By his math, when factoring differences in plans, the potential savings came down to a “mere $228.84 per year” – not $1,000.
“T-Mobile's claim that customers can save over $1,000 per year on a comparable plan by switching from Verizon to T-Mobile ‘is arithmetically unattainable unless T-Mobile fabricates cost, ignores promotions or assigns invented values to optional benefits and niche features,’” he wrote.
While Verizon isn’t exactly a hero in all this – “the court in no way suggests that Verizon’s hands are clean” – it at least took down a questionable price comparison tool before pursuing its court challenge to T-Mobile’s ads. That may have been a factor in the judge’s decision-making.
AT&T makes similar claims
Meanwhile, it looks like the legal wrangling will continue for the foreseeable future. AT&T has made similar claims against T-Mobile in a Texas court and amended a lawsuit over the Easy Switch tool in February, adding assertions about misleading ads and violation of the Lanham Act.
AT&T also used language about T-Mobile doing an “apples-to-oranges” comparisons when it comes to price plans.
Jeff Moore is principal of Wave7 Research, a firm that closely tracks carrier price plans and advertisements across the postpaid and prepaid industries.
He sees the fights over advertising mostly as a “tempest in a teapot” that highlights the need for independent third-party assessments in the pricing category, similar to how independent studies are used for network quality from firms like Ookla and Opensignal.
Price plans are highly variable and often depend on what carriers think consumers value most, whether it be hotspot data, international roaming, streaming services or something else.
He could envision T-Mobile spinning the guff from Verizon and AT&T to its own advantage, saying the two big legacy carriers are ganging up on T-Mobile because it’s trying to sell more affordable services. That’s been in T-Mobile’s signature playbook for years.
“I could easily see them saying that,” he said.