Justice Department Probes US Wireless Carriers' Work on SIM Card Alternative

AT&T, Verizon under DoJ antitrust investigation for possible eSIM collusion, report says

The U.S. Department of Justice is reportedly investigating whether two major wireless carriers colluded with an industry trade group to make it more hard for customers to switch service providers.

The technology, which is already available in Apple's iPads, makes it possible to switch between carriers without having to change out a physical SIM.

The probe is also looking into whether industry standards organization GSMA was part of the collusion.

A Justice Department spokesperson declined to comment, saying in an email that "as a matter of policy, the Department of Justice does not confirm, deny, or otherwise comment, on the existence or nonexistence of investigations". The big four - Verizon, AT&T, T-Mobile US Inc. and Sprint Corp. - agreed in 2013 to let consumers use smartphones on other networks after contracts expire.

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AT&T said it's aware of the investigation and has provided information to the government in response to its requests.

The GSMA declined to comment. This would make it impossible for customers to switch carriers and runs counter to the goal of eSIM. "The reality is that we have a difference of opinion with a couple of phone equipment manufacturers regarding the development of e-SIM standards". The company said it "will continue to work proactively within GSMA, including with those who might disagree with the proposed standards, to move this issue forward". Verizon closed down 1.1 percent to $47.90 after losing as much as 2.5 percent. The New York Times reported on the antitrust inquiry earlier Friday.

It is common practice for the Justice Department to send CIDs, the civil equivalent of a subpoena, to all major players in the industry because the agency wants evidence from companies that allegedly participate in any conspiracy as well as those outside of it, according to Ethan Glass, a former trial attorney with the Justice Department now at the law firm Quinn Emanuel Urquhart & Sullivan LLP.

And there have been industry movements toward SIM cards that can switch among carriers. Collusion to maintain their dominant positions in the market, assuming it happened, would be problematic and is the source of the DOJ's alleged investigation. For example, in 2014 Apple introduced a SIM for its iPad that allowed some users - but not those from AT&T - to switch among providers.

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