DOJ Investigating AT&T, Verizon for Collusion

Doug Carpenter
April 21, 2018

The Justice Department is investigating whether AT&T and Verizon colluded with a wireless standards organization to make it harder for consumers to switch phone carriers, according to The New York Times.

The technology is supposed to allow customers to switch wireless carriers without having to change out their hardware SIM cards.

In a private meeting this year of a task force called GSMA North America, AT&T and Verizon pushed for the ability to lock phones to their networks, bypassing the objective of eSIM technology, said Harold Feld, a senior vice president of Public Knowledge, a nonprofit consumer group, who was briefed on the meeting. The Justice Department declined to comment on the matter to the NYT.

The investigation was opened about five month ago, the Times reported.

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.

AT&T said it's aware of the investigation and has provided information to the government in response to its requests. Apple declined to comment. "We've been proactively and constructively working with the Department of Justice for several months regarding this inquiry and we continue to do so". Verizon closed down 1.1 percent to $47.90 after losing as much as 2.5 percent.

AT&T is already locked in a legal battle with the Justice Department over its plan to acquire Time Warner.

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. Under eSIM, user identification technology of a traditional SIM card is instead transferred to the device's processor or modem itself. 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 acknowledged the eSIM investigation in a statement.

AT&T and Time Warner have disputed the claims in court.

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