Justice Department said to investigate AT&T, Verizon over wireless collusion claim

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The New York Times today reported that the Justice Department opened an antitrust investigation into the two largest USA carriers, as well as the GSMA trade group responsible for setting cellular standards.

Federal prosecutors are reportedly investigating allegations of collusion by the U.S.'s two largest wireless carriers and a global industry group.

That would have been accomplished by thwarting "eSIM" technology, which lets people remotely switch providers without inserting a new SIM card into their device.

The G.S.M.A., a mobile industry standards-setting group, is also part of the investigation, according to the NY Times.

The Justice Department, the GSMA and Apple have all declined to comment on the situation. The Justice Department investigation was opened about five months ago after device makers, filed a formal complaint with the Department of Justice regarding the switching issues, Bloomberg reports. With eSIM, you wouldn't need a new, physical SIM card to move between AT&T and Verizon, for example.

AT&T and the GSMA declined to respond.

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An AT&T spokesman said in an email: "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".

AT&T and Verizon together control about 70 percent of all wireless subscriptions in the United States. The following year President Barack Obama signed legislation giving consumers the freedom to switch between wireless carriers without having to purchase a new phone. "Nothing more", Verizon's Young said.

The investigation highlights a push by the Justice Department's antitrust chief, Makan Delrahim, to crack down on the opaque world of intellectual property, or I.P., standards. Collusion to maintain their dominant positions in the market, assuming it happened, would be problematic and is the source of the DOJ's alleged investigation.

At the same time, the Justice Department is suing AT&T to block its $85.4 billion merger with Time Warner.

T-Mobile and Sprint allow iPad users to switch between carriers via a menu on the iPad, while AT&T users can use the eSIM but not to switch to another carrier.

Observers of the trial say AT&T appears to have an advantage after exposing weaknesses in the government's pricing power claims.