People have long accused Verizon and AT&T of abusing their market share to the detriment of the overall wireless market. But the two may have crossed a legal line: The Justice Department has reportedly launched an investigation into alleged collusion by Verizon and AT&T to make switching carriers more difficult than necessary.
According to The New York Times, the issue at hand is over eSIM technology, which replaces the traditional SIM card in your phone with an embedded chip that can be reconfigured without needing to physically remove it from the device. The technology was first announced in 2016 and has since found its way into many mainstream devices including Google’s Pixel 2, Apple’s iPhone X, Microsoft’s Surface Pro, and others.
However, the DOJ is now reportedly investigating claims that Verizon, AT&T, and potentially even the GSMA, a group that represents wireless carriers worldwide, illegally collaborated to establish standards that would allow carriers to lock a device to a certain network, even if the phone was using an eSIM.
This would make the hassle of switching carriers even more annoying, while also stifling competition and potentially discouraging innovation. Combined, AT&T and Verizon control 70 percent of the US wireless market.
Sources who spoke with the Times said the investigation was prompted after formal complaints were filed to the Justice Department by at least one device maker and one wireless carrier. By allegedly pushing the GSMA to allow eSIMs to be locked to a single carrier, AT&T and Verizon would have essentially disabled one of the most important functions of eSIM technology.
Locking down phones is a consumer-unfriendly policy that carriers often try to justify by saying the practice helps cuts down on theft and fraud. It was only after pressure from the Federal Communications Commission in 2013 that carriers agreed to unlock phones so they could be used on a competitor’s network—but only after the device had been fully paid off.
Hopefully, the investigation by the Justice Department will help prevent history from repeating itself, because dealing with wireless carriers is already enough of a pain, and trying to switch carriers really shouldn’t be as hard as it is.
Update 7:30 ET: Verizon and AT&T have both responded with official statements regarding the DoJ’s investigation.
Verizon spokesperson Rich Young says “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.”
Meanwhile, a spokesperson from AT&T said “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.”