The U.S. Justice Department has opened a probe of potential coordination by AT&T Inc, Verizon Communications, a telecommunications standards organization and potentially other providers to hinder consumers from easily switching wireless carriers, a person briefed on the matter said on Friday.
Verizon confirmed the government inquiry, calling it “much ado about nothing,” adding that it has been working with the Justice Department for several months “regarding the inquiry,” according to spokesman Rich Young.
The New York Times reported on Friday that the Justice Department had opened an investigation about five months ago after at least one device maker and one wireless carrier filed formal complaints with the Justice Department.
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 technology allows consumers to switch wireless providers without having to insert a new physical SIM card, making it easier to compare wireless networks and select service as desired.
“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,” Verizon’s Young said.
News of the probe comes at a critical time for AT&T which is being sued by the Justice Department to stop its deal to buy media company Time Warner Inc.
The U.S. government has argued in a trial that is nearing completion that the proposed deal would spur AT&T to charge its pay TV rivals more for Time Warner content.
The Department of Justice, AT&T and the GSMA, the telecommunications standard setting group, declined to comment on news of the investigation.
Shares of AT&T and Verizon dipped after the initial Times report, with AT&T closing down 0.4 percent at $34.67, and Verizon ending off 1.1 percent, at $47.90.
The person briefed on the matter told Reuters the Obama administration had investigated similar claims in 2016 but did not take any action. (Reporting by Munsif Vengattil in Bengaluru and David Shepardson and Diane Bartz in Washington; Editing by Grebler and Sandra Maler)