The Justice Department reportedly issued demands to AT&T, Verizon and the GSMA, a mobile industry standards-setting group, for information on potential collusion to thwart a technology known as eSIM, hindering consumers from easily switching wireless carriers. According to the sources cited, officials are looking into whether the two carriers, as well as telecom standards organization GSMA, colluded to make it harder for customers to switch providers.
That would have been accomplished by thwarting "eSIM" technology, which lets people remotely switch providers without inserting a new SIM card into their device.
"There is a constant problem with industry standards-setting organizations that on the one hand allow the industry to come together for the goal of efficiency but can be very anticompetitive and operate in secrecy", consumer advocate Harold Feld tells the Times. The Justice Department declined to comment on the matter to the NYT. The sources further claim that the agency launched its investigation five months ago after receiving tips from a wireless carrier and at least one device maker.
"We are aware of the investigation into GSMA's process for developing eSIM standards that provide a better experience for consumers", AT&T said.
AT&T and the GSMA declined to respond. Nothing more. We've been proactively and constructively working with the Department of Justice for several months regarding this inquiry and we continue to do so.
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Verizon and AT&T fell on the news.
The push by the major carriers to restrict the flexibility of eSIM run counter to a movement in which consumers were gaining more flexibility to move from carrier to carrier. "Nothing more", Verizon's Young said.
FBN's Connell McShane discusses the court battle between AT&T-Time Warner and the Department of Justice. The Justice Department hasn't confirmed the allegations at this time.
News of the investigation comes at the same time as the Justice Department is suing to block an acquisition of Time Warner by AT&T. With an eSIM embedded in a handset, the user doesn't have to swap a SIM card on a phone to change carriers. 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.
AT&T sent us a statement, too.