Justice Department Issues Business Review Letter to the GSMA Related to Innovative eSIMs Standard for Mobile Devices

According to the Antitrust Division’s investigation, the GSMA and its mobile network operator members used an unbalanced standard-setting process, with procedures that stacked the deck in their favor, to enact an RSP Specification that included provisions designed to limit competition among networks.
According to the Antitrust Division’s investigation, the GSMA and its mobile network operator members used an unbalanced standard-setting process, with procedures that stacked the deck in their favor, to enact an RSP Specification that included provisions designed to limit competition among networks.

Justice Department Issues Business Review Letter to the GSMA Related to Innovative eSIMs Standard for Mobile Devices

The Department of Justice’s Antitrust Division recently announced that it has completed a nearly two-year long investigation into the standard-setting activities of the GSM Association (GSMA), a trade association for mobile network operators.

The Antitrust Division’s investigation revealed that, in recent years, the GSMA used its industry influence to steer the design of eSIMs technology in mobile devices.

In response to the investigation, the GSMA has drafted new standard-setting procedures that will incorporate more input from non-operator members of the mobile communications industry.

According to a news release, the new standard-setting process will have a greater likelihood of creating procompetitive benefits for consumers of mobile devices; it will also curb the ability of mobile network operators to use the GSMA standard as a way to avoid new forms of disruptive competition that the embedded SIMs (eSIMs) technology may unleash.

The GSMA expressed its intent to adopt the new procedures in a request for a business review letter from the Antitrust Division. After completing its investigation, the division recently issued a business review letter that expresses concern about the past procedures and some of the resulting provisions in the standard.

The letter concludes, however, that the proposed changes appear to adequately address those concerns. In light of these planned changes, the Antitrust Division has no present intention to bring an enforcement action against the GSMA or its mobile network operator members.

“I am pleased that the GSMA is ready to use its standard-setting process to create a more consumer-friendly eSIM standard,” said Assistant Attorney General Makan Delrahim.

“The GSMA’s old procedures resulted in certain eSIMs rules that benefitted only its incumbent mobile network operators at the risk of innovation and American consumers. The new procedures proposed going forward significantly reduce that risk and should result in new innovative offerings for consumers.”

The mobile communications industry has begun to migrate away from traditional SIM cards—a removable plastic card that is preprogrammed to connect to a single mobile network—and toward innovative eSIMs, which perform the same function as a SIM card but are soldered into the device and capable of being remotely programmed and re-programmed to connect to different operators’ mobile networks. The mobile industry refers to this process as Remote SIM Provisioning (RSP).

According to the Antitrust Division’s investigation, the GSMA and its mobile network operator members used an unbalanced standard-setting process, with procedures that stacked the deck in their favor, to enact an RSP Specification that included provisions designed to limit competition among networks. When standard-setting organizations are used in an anticompetitive manner, the division stands ready to evaluate that conduct under the antitrust laws and take whatever action is necessary to restore competition.

The GSMA is a non-profit association with its headquarters in London, United Kingdom, and additional offices throughout the world, including offices in Atlanta, Georgia, and San Francisco, California. The GSMA is a trade association representing mobile operators worldwide, including more than 750 operators and over 350 companies in the broader mobile ecosystem. GSMA’s membership includes all of the major mobile network operators worldwide, including the major, national carriers in the United States.

Under the Department of Justice’s business review procedure, an organization may submit a proposed action to the Antitrust Division and receive a statement as to whether the division currently intends to challenge the action under the antitrust laws based on the information provided. The department reserves the right to challenge the proposed action under the antitrust laws if the actual operation of the proposed conduct proves to be anticompetitive in purpose or effect.

Copies of the business review request and the department’s response are available on the Antitrust Division’s website at https://www.justice.gov/atr/business-review-letters-and-request-letters, as well as in a file maintained by the Antitrust Documents Group of the Antitrust Division. After a 30-day waiting period, any documents supporting the business review will be added to the file, unless a basis for their exclusion for reasons of confidentiality has been established under the business review procedure. Supporting documents in the file will be maintained for a period of one year, and copies will be available upon request to the FOIA/Privacy Act Unit, Antitrust Documents Group at atrdocs.grp@usdoj.gov.

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