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Department of Justice reportedly investigating AT&T and Verizon over collusion against eSIM technology

Department of Justice reportedly investigating AT&T and Verizon over collusion against eSIM technology

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Illustration by Alex Castro / The Verge

The US Department of Justice has reportedly opened an antitrust investigation to determine whether AT&T, Verizon, and mobile industry group GSM Association (GSMA) colluded to prevent consumers from easily switching carriers with devices that support eSIM, according to The New York Times. All four major carriers received requests for information about the investigation, according to CNBC.

The Times reports that the DOJ "demanded" details from the three over potential steps taken to impede the adoption of eSIM, which lets wireless customers switch carriers without requiring a physical SIM card to be inserted. AT&T and Verizon are accused of working with GSMA to develop standards that would allow them to keep devices locked to their networks, even if it used eSIM technology. An unnamed device maker and mystery wireless carrier complained to the Justice Department, which led to the investigation. Additional device makers and wireless companies reportedly added to those complaints, The New York Times says.

The Department of Justice would not comment on the existence or nonexistence of this investigation to The Verge. Verizon spokesman Rich Young issued this comment:

“The accusations regarding this issue are much ado about nothing. We are striving to provide a better experience for the consumer. The reality is that we have a difference of opinion with a couple of phone equipment manufacturers regarding the development of e-SIM standards. 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. As we have from the outset, we will continue to work with Federal officials and others in the industry as we strive to find a mutually acceptable solution.”

AT&T also provided a response to the investigation:

We are aware of the investigation into GSMA’s process for developing eSIM standards that provide a better experience for consumers.  Along with other GSMA members, we have provided information to the government in response to their requests and will continue to work proactively within GSMA, including with those who might disagree with the proposed standards, to move this issue forward.

eSIM first appeared in smartphones with Google’s Pixel 2 and Pixel 2 XL. But right now the Pixel eSIM only works with Google's own Project Fi service, which uses the devices’ built-in eSIMs to authenticate cellular accounts. eSIM is also used in Apple’s iPad with LTE data, but is unsupported by Verizon.

Switching physical SIM cards is an annoying task and a burden on users. They have to use a paper clip or similar device to remove their SIM tray and also have to receive a new card whenever they switch carriers. It could prevent people from switching, especially when coupled with locked devices. Earlier this year, Verizon reverted to selling carrier-locked phones as a reported response to theft. The company locks phones initially and will only unlock them once customers finish the activation process. It’s supposed to roll out a mandatory wait period this spring, although we don’t have that timeline yet.

Sprint also requires that devices be “active on the Sprint network for a minimum of 50 days” before it unlocks the device, although for devices launched after February 2015, Sprint will automatically unlock phones when they become eligible without requiring users to submit a manual request. AT&T requires that the phone be active for at least 60 days. There’s an additional caveat that users who upgrade their phone will still need to wait 14 days before AT&T unlocks their old device. T-Mobile requires that a device be active at least 40 days, with a limit of two unlock requests per line per year.

Update 5:15 PM ET, 4/20: Updated to include Verizon’s comment.