Collusion Accusations Hit Telecom's 2 Biggest Firms

Verizon, AT&T being investigated by DOJ for possibly suppressing SIM card technology
By Jenn Gidman,  Newser Staff
Posted Apr 21, 2018 6:30 AM CDT
Collusion Accusations Hit Telecom's 2 Biggest Firms
This July 25, 2016, file photo shows signage at a Verizon store in North Andover, Mass.   (AP Photo/Elise Amendola, File)

The word "collusion" is being bandied about again, but this time it involves the world of telecommunications, not DC. Verizon, AT&T, and standards group GSMA tell the AP the Justice Department has opened up an antitrust probe to see if they worked together to make it more difficult for consumers to move to another wireless carrier. The New York Times was the first to report on the investigation, with sources saying the DOJ started poking around about five months ago to see if the companies were in cahoots over a technology called eSIM, which allows consumers to switch carriers without having to swap out the tiny SIM card inside their phones. Verizon and AT&T, the two biggest wireless carriers (together they hold 70% of the wireless market share) are being accused of collaborating with GSMA to keep phones locked into their network even if they're eSIM-equipped.

The probe was opened after at least one other wireless carrier and one device maker registered complaints. One source tells the Times the device maker was Apple, which has adopted the eSIM technology, along with Microsoft, Google, and both US and global wireless carriers. DOJ antitrust chief Makan Delrahim has been pushing hard against "cartel-like behavior" meant to suppress competition and fix prices. An AT&T rep confirms to the Times the company knows about the investigation and has been working with the DOJ to "move this issue forward." A Verizon spokesman makes a similar statement, noting Verizon has been cooperating with the government to work out "a difference of opinion with a couple of phone equipment manufacturers." However, the spokesman adds the whole kerfuffle is "much ado about nothing." (The DOJ has sued to stop an AT&T merger with Time Warner.)

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