Shares of AT&T and Verizon dipped after the initial Times report, with AT&T closing down 0.4 per cent at US$34.67, and Verizon ending off 1.1 per cent, at US$47.90. According to reports, the carriers got together to put the kibosh on technology that would allow consumers to switch carriers without changing the SIM card on their phones.
The U.S. Justice Department has reportedly opened an antitrust investigation into claims that AT&T, Verizon, and the G.S.M.A, a mobile industry standards group, colluded to prevent customers from easily switching wireless carriers using eSIM technology.
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.
"Apple's desperate for this technology to be there because they want to make the phone smaller and thinner", Kyle Wiens, chief executive of iFixit, which break down down iPhones and writes an iPhone fix manual, said to The Wall Street Journal.
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The court said that the conduct of the petitioners and the intervenors "scandalised the process of the court and prima facie constitutes criminal contempt".
A spokesman for Verizon downplayed the importance of the investigation.
"This accusations regarding this issue are much a do about nothing", he said in a statement.
"In the context of antitrust and IP, we will be inclined to investigate and enforce when we see evidence of collusive conduct undertaken for the objective of fixing prices, or excluding particular competitors or products", Delrahim said in a speech this month at a conference in Washington, D.C. He previously warned of the potential for "cartellike behavior" by competitors that got together with standards-setting organizations. "The reality is that we have a difference of opinion with a couple of phone equipment manufacturers regarding the development of e-SIM standards. 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".
The Times said the Justice Department sent demands to AT&T, Verizon and the GSMA, an industry standards-setting group, on efforts to thwart a technology called eSIM. The DOJ argues that the deal will hurt competition and lead to higher prices.