United States investigating AT&T and Verizon over eSIM collusion

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The US Department of Justice is investigating AT&T and Verizon for allegedly colluding with the GSMA to influence eSIM standards so as not to threaten their dominance over the US consumer market.

eSIM, short for embedded SIM, is a new format of the ubiquitous SIM cards that are used in phones and other mobile devices to securely identify and authenticate a user on a carrier's network. eSIMs are non-removable chips that are embedded into a device and allow consumers to switch networks through software settings instead of having to physically remove and insert a small piece of plastic into their device.

The inquiry is also reportedly targeting the GSMA, a wireless trade group.

Apple (NASDAQ:) is the 500-pound gorilla behind a Justice Dept. probe of the big four wireless carriers that dented their stocks this afternoon, Bloomberg is saying, and multiple device makers are said to have complained about potential coordination.

The probe will unfold alongside the Justice Department's ongoing effort to block a proposed $85.4 billion merger between AT&T and Time Warner, citing concerns that the deal would be harmful to consumers.

FBN's Connell McShane discusses the court battle between AT&T-Time Warner and the Department of Justice.

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Also on Thursday, Frenchman Richard Gasquet claimed his 500th career victory in defeating German Mischa Zverev 6-2, 7-5. Second-seeded Marin Cilic advanced without hitting a ball after Milos Raonic pulled out with a right knee injury.

"The accusations regarding this issue are much ado about nothing", Verizon spokesman Rich Young said in a statement to The Wall Street Journal. 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.

Apple has been including eSIM technology in its iPads for some time now, and began offering it with its Series 3 cellular Apple Watches as well. AT&T told the Times that it was aware of the investigation and cooperating with authorities.

At issue is a technology that could make carriers' business more volatile.

Verizon claimed it needed to be able to lock down phones to prevent theft and fraud, but Ferras Vinh, a policy expert at the Center for Democracy and Technology noted: "The actions would limit choice for consumers and harm competition".

"There is a constant problem with industry standards-setting organizations that on the one hand allow the industry to come together for the objective of efficiency but can be very anti-competitive and operate in secrecy", Feld said.