The Department of Justice (DOJ) has closed the eSIM collusion probe involving AT&T, Verizon, and the GSM Association (GSMA). The DOJ launched the investigation early last year over concerns that the three parties are working together to hinder the eSIM technology. The investigation has now been dropped after the groups agreed to change their practices, The New York Times reports.
eSIM (or embedded SIM) is a digital version of the traditional SIM card. It allows consumers to switch carriers at the touch of a button. Not only this save time and effort, but also makes it easier to compare wireless networks and select a new service when desired. Further, an eSIM also frees up some space in the phone for other features, as it takes much less space than a physical SIM card.
While phone makers are increasingly offering eSIM technology in their devices, the technology hasn’t quite met the same kind of adoption from service providers. GSMA, the governing body that sets standards on eSIM technology, along with its carrier partners have been making rules around eSIMs that made it harder for consumers to switch carriers. Apparently, some of the rules allowed carriers to lock down phones and prevent users from switching networks.
The DOJ tried to investigate these anti-competitive practices but has now dropped the investigation. The agency was pleased that GSMA is ready to make some changes that would create a more consumer-friendly eSIM standard.
“We applaud GSMA’s efforts to ensure that its new process provides for an adequate balance of interests,” wrote Makan Delrahim, the agency’s head of antitrust, in a letter addressed to the organization.
T-Mobile and Sprint are also a part of GSMA, but AT&T and Verizon together control about 70 percent of all wireless subscriptions in the US.
Good news for eSIM
The DOJ’s decision to end the investigation is quite anticlimactic. After having demanded millions of pages of documents from the three parties to determine whether the nation’s two biggest wireless carriers “used the eSIM technology to unfairly maintain their dominance,” the agency is now leaving it to the organization itself to resolve any competitive problems by creating new rules. The Justice Department did nothing more than force a change in anti-competitive behavior.
Nevertheless, it’s good news for eSIM. This change might finally give the technology a much-needed boost. But only if GSMA makes eSIM open to any network and places some strict laws. Otherwise, eSIMs pose some serious competitive problems. With physical SIM cards, you can switch carriers by removing one SIM card and inserting another. You can even use two networks at once if you own a dual-SIM phone. But with eSIMs, carriers can prevent all that from happening.
Interestingly, the DOJ said it has “no present intention” to pursue an antitrust probe against GSMA. The department wants to sit back and watch how the eSIM standard develops. If the situation doesn’t improve, it could take some action eventually.