DOJ Probes Verizon, AT&T, GSMA Collusion over eSIM Technology

REUTERS  Mario Anzuoni  File

DOJ investigating AT&T and Verizon for collusion

A telecommunications standards organization - GSMA - said on Saturday it is delaying implementation of a new cellphone technology due to a United States government probe of alleged coordination between the group, AT&T Inc and Verizon Communications Inc to hinder consumers from easily switching wireless carriers.

The Justice Department is looking into whether the two wireless carriers worked with the GSMA to thwart a technology known as eSIM, which lets people remotely switch wireless providers without having to swap out a SIM card. According to GSMA, the eSIM standard developed in conjunction with AT&T and Verizon throws a wrench into these plans by allowing carriers keep an eSIM-equipped device locked to their network.

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Representatives from Verizon Wireless and AT&T acknowledged the inquiry by the Justice Department, with a Verizon spokesman telling the NYTimes that the issue was "much ado about nothing". The DOJ's investigation could show that the companies along with the GSMA were trying to influence the development of this technology in order to maintain their market dominance. For companies like Apple, eSIM technology would free up storage space in devices to use for other technologies like bigger processors and batteries. The Apple Watch 3, Google Pixel 2 smartphone and Microsoft Surface all have eSIM abilities, for example. The GSMA has issued a statement in response to the story which announced that the organization has halted development of the eSIM standard until the ongoing investigation is completed.

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The probe will unfold alongside the Justice Department's ongoing effort to block a proposed $85.4 billion merger between AT&T and Time Warner, citing concerns that the deal would be harmful to consumers. It would also make it easier for people to use their devices while traveling for business. This would make it impossible for customers to switch carriers and runs counter to the goal of eSIM.

The person also said the Justice Department previously examined this matter in 2016, but ended up dropping the investigation. Verizon has said it needed to be able to lock down phones to prevent theft and fraud.

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