U.S. investigating AT&T and Verizon over eSIM collusion

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

Verizon, AT&T fall on report DOJ is probing collusion (updated)

The into whether AT&T (NYSE:) and Verizon (NYSE:) might be colluding to thwart "eSIM" technology that eases switching from carrier to carrier, The New York Times reported, sending their stocks into a decline before they partly recovered by the close.

The agency in February sent civil investigative demands to major US wireless carriers and the GSMA, an worldwide standards organization responsible for eSIM technology, the people said.

The inquiry is also reportedly targeting the GSMA, a wireless trade group. According to reports, the carriers got together to put the kibosh on technology that would allow consumers to switch carriers without changing the SIM card on their phones.

Apple and other equipment makers have complained to the Justice Department about wireless carrier practices related to eSIM technology, two sources familiar with the matter said. The device maker was Apple, one of them said.

None of the entities under investigation commented for the NYT report.

Verizon told Fox 5 that this is much ado about nothing.

Carriers like AT&T and Verizon have increasingly been losing subscribers to T-Mobile, thanks to more consumer friendly policies ranging from cheaper worldwide roaming to the elimination of hidden fees and long-term contracts.

Verizon and AT&T fell on the news.

In addition to making switching providers easier, eSIM could also allow people to use local carriers during worldwide travel and enable the space ordinarily reserved for SIM cards to be taken up by other phone systems. He has said the Justice Department will scrutinize potential coordination in standards-setting organizations that can hurt competition.

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

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.

CNN's video below covers why the AT&T Time Warner trial matters.

Most mobile phones use SIM cards, which contain unique identifying information about a user and are inserted into the devices so the phones can function. This makes it easy for consumers to swap between wireless carriers without physically popping the SIM card chip out or contacting their wireless carrier.

Apple has been including eSIM technology in its iPads for some time now, and began offering it with its Series 3 cellular Apple Watches as well. The newspaper cites six people with knowledge of the inquiry and alleges the wireless carriers worked in coordination to make it more hard for people to switch carriers. In late 2013, under pressure by the Federal Communications Commission, the wireless industry agreed to let people take devices off any particular network without penalty once the devices were fully paid for.

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