Verizon Communications Inc. (NYSE:VZ) has formally initiated a federal lawsuit against T-Mobile U.S. (NASDAQ:TMUS), accusing its rival of disseminating misleading advertising that overstates the potential annual savings customers may realize by switching wireless providers by more than $1,000. This legal complaint, filed in Manhattan's federal court, claims that T-Mobile's promotional activities constitute false advertising that has caused significant and irreparable harm.
The core of Verizon's allegations centers on T-Mobile's assertions of consumer savings, which the lawsuit describes as inflated, with some claims purportedly exaggerating savings by upwards of 100%. Verizon argues that these advertisements create misleading impressions about the financial benefits of switching carriers, distorting consumer expectations.
Significantly, Verizon's complaint notes that the contested advertising claims remain substantially unchanged from previous promotional assertions that were scrutinized and found lacking by the National Advertising Review Board in 2025 and 2026. Despite these regulatory warnings highlighting the unsubstantiated and misleading nature of the savings promises, T-Mobile has allegedly persisted in presenting this messaging.
A particular point of dispute concerns the way T-Mobile's advertising represents service bundles. Verizon asserts that T-Mobile's advertisements underreport the discounts Verizon offers through various packaged services. These services often bundle entertainment products from major providers including Netflix Inc. (NASDAQ:NFLX), Warner Bros. Discovery's HBO Max (NASDAQ:WBD), and offerings from The Walt Disney Company including Hulu, Disney+, and ESPN+ (NYSE:DIS).
In pursuit of remedy, Verizon is seeking triple damages as permitted under the federal Lanham Act, contending that T-Mobile's actions reflect intentional false advertisement. Additional claims in the lawsuit cite violations under New York's laws governing unfair competition and trade practices. Furthermore, Verizon's filing requests that the court issue an injunction to prevent T-Mobile from continuing to disseminate the advertisements in question.
Regarding market standings, Verizon currently maintains a subscriber base of approximately 146.9 million customers, which slightly exceeds T-Mobile's 139.9 million. AT&T (NYSE:T) holds the third position with around 120.1 million subscribers. Neither T-Mobile nor Verizon has promptly supplied comments in response to requests for elaboration.
This lawsuit follows closely on the heels of Verizon's strong financial performance announcement for the fourth quarter. The company reported revenues totaling $36.40 billion, marking a 2% increase year-over-year and surpassing analyst expectations. Adjusted earnings per share stood at $1.09, also exceeding forecasts. Within that quarter, Verizon added 616,000 postpaid phone subscribers, the best showing since 2019.
T-Mobile is expected to release its own fourth-quarter earnings on February 11, which will provide further insight into its fiscal health and competitive positioning.
In response to the lawsuit announcement, Verizon's shares experienced a 1.72% gain during Wednesday trading but traded slightly lower by 0.34% in after-hours transactions. An evaluation of the stock indicates a robust price performance across short, medium, and long-term horizons, coupled with a mid-tier value ranking according to recent equity assessments.
As the legal contest between Verizon and T-Mobile unfolds, it exemplifies the complexities inherent in competitive marketing within the wireless sector, particularly as it pertains to promotional accuracy and regulatory compliance. The outcome may have broader implications for advertising standards and consumer expectations within the industry.