Telecom Giants Fined a Joint $10.22M on ‘Misleading Customers’
Verizon Communications Inc (VZ:US), T-Mobile US Inc (TMUS:US), and AT&T Inc (T:US) serve as the US’s top three mobile carriers. Catering to as many as 4 million subscribers respectively, these three companies boast one of the strongest standings in the telecom industry. While marketing is a necessity in bringing in customers, these giants, unfortunately, are facing legal challenges due to some of their advertising strategies.
On May 11, all three companies agreed to collectively pay a sum of $10.22 million to several states to resolve allegations of misleading customers regarding their "unlimited" plans and "free" phone promotions.
According to the legal investigation presented by Letitia James, Attorney General of New York State, all three companies were ordered to make their ads and promotional materials as clear as possible. They needed to be as conspicuous as possible on the amount of data in a set period a service would allow.
The Attorney General asserted that the companies deceived consumers and breached legal regulations. While all three companies denied the charges, they agreed to the settlement.
This recent development comes after the Federal Communications Commission fined Verizon, AT&T, and T-Mobile up to $200 million for sharing data on customers’ locations against their consent. Announced on April 29, 2024, this case stems from back in 2018 when Sen. Ron Wyden first highlighted the mobile carriers as reselling customers' data.
Rep. Ro Khanna and Sen. Angus King reported buying up to $15,000 worth of Verizon shares each on April 26 and March 7 respectively. TMUS’s last reported congressional trades were in 2023; it was bought by Rep. Khanna along with Rep. Jared Moskowitz and sold by Rep. John Curtis. AT&T stock was last traded by Rep. Chip Roy who sold up to 897 shares on April 10. Before this, T stock was purchased by Representatives Brian Mast, Bill Keating, and Senator Virginia Foxx.
In terms of stock price, all three stocks have been facing a rocky year but seem poised for bull runs. This is particularly the case for T-Mobile and Verizon who reported writing up deals to purchase US Cellular. Whether the $10.22 million fine will shake things further remains to be seen.
