AT&T and T-Mobile, it is no secret, are in an intense competition for customers. As part of that competition, T-Mobile started a "Banned Seniors" advertising campaign that included statements about where AT&T made certain senior discounts available and comparing them to the availability of T-Mobile senior discounts.
AT&T believed the comparisons to be in violation of the Lanham Act's prohibitions on false advertising and sued T-Mobile in the federal Eastern District of Texas. AT&T sought a preliminary injunction from the court to stop T-Mobile's comparison campaign.
On January 18, 2023, the court denied the preliminary injunction because AT&T failed to make a prima facie case that there was a substantial likelihood it would succeed on the merits of its claim. The Court explained that there are two ways to establish the first element of a false advertising claims:
Prove literal falsity, so misleading consumers is presumed; or
Prove misleading and confusing, even if not literally false--actual deception cannot be assumed and must be demonstrated.
AT&T staked its claim on literal falsity, which the court explained is a "rigorous" standard. It must be shown that it is "false on its face" or "bald-faced, egregious, undeniable, [and] over the top." In other words, "if the language at issue is susceptible to more than one reasonable interpretation, the advertisement cannot be literally false."
AT&T took issue with T-Mobile's claim that AT&T senior discounts were only available in Florida, because it also offered a discount to AARP members, a group that focuses on serving the 50+ population. Rather than "banning" senior discounts, AT&T argued it provided them nationwide through its AARP partnership. But T-Mobile pointed out that AARP membership was the basis of the nationwide AT&T program and that AT&T's only explicitly age-based discount was available in Florida.
Because there were significant factual disputes underlying how both parties interpreted the veracity of the statements used to describe these different approaches to discounts, the court found that there was not a substantial likelihood of success on the merits with respect to AT&T being able to show literal falsity: at this stage of the litigation it appeared both parties had reasonable interpretations of the words used, making a literal-falsity claim impossible. So the Court denied the motion for preliminary injunction.