AT&T and Verizon collusion probe tipped at Justice Department

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

Today, the Justice Department opened an investigation into AT&T, Verizon, and GSMA, a mobile networks trade standards organization, according to The New York Times. The eSIM standard lets wireless subscribers move their phone number to a new carrier without having to.

The DOJ is specifically looking into how AT&T and Verizon worked with GSMA - as recently as this year - to establish standards that would lock eSIM phones to a network. The Justice Department investigation was opened about five months ago after device makers, filed a formal complaint with the Department of Justice regarding the switching issues, Bloomberg reports. CNBC clearly points out that the "one device maker" was Apple.

AT&T and Verizon are the giants of the US wireless business, controlling about 70 percent of all wireless subscriptions.

The source said the Obama administration had investigated similar claims in 2016 but did not take any action. Read the NY Times report here.

Verizon repudiated the claim, arguing a "difference of opinion with a couple of phone equipment manufacturers regarding the development of eSIM standards," but has been working with the USA government on the inquiry.

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AT&T and Verizon together control about 70 percent of all wireless subscriptions in the United States.

In addition to making switching providers easier, eSIM could also allow people to use local carriers during global travel and enable the space ordinarily reserved for SIM cards to be taken up by other phone systems. AT&T told the Times that it was aware of the investigation and cooperating with authorities.

"In the context of antitrust and I.P., we will be inclined to investigate and enforce when we see evidence of collusive conduct undertaken for the objective of fixing prices, or excluding particular competitors or products", Mr. Delrahim said in a speech this month at a conference in Washington.

"There is a constant problem with industry standards-setting organizations that on the one hand allow the industry to come together for the objective of efficiency but can be very anti-competitive and operate in secrecy", Feld said. This is likely why CNBC believes that it was Apple who contacted the government to complain about the problem. 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.

The US government has argued in a trial that is nearing completion that the proposed deal would spur AT&T to charge its pay TV rivals more for Time Warner content.

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