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Apple facing multi-state probe for ‘deceiving consumers’ – and Texas attorney general may sue

Multiple U.S. states are investigating Apple Inc for potentially deceiving consumers, according to a March document obtained by a tech watchdog group.

The Texas attorney general may sue Apple for violating the state’s deceptive trade practices law in connection with the multi-state investigation, according to the document, which was obtained by the Tech Transparency Project.

The document, obtained through a public records request, did not provide additional details and it is not certain what other states are involved. 

Apple shares fell 4.3 percent and pulled the Dow, Nasdaq and S&P 500 lower as the news was revealed.  

According to the document provided to Axios, Texas AG’s Consumer Protection Division ‘initiated this investigation for enforcement purposes’. 

‘If violations are uncovered, CPD will initiate enforcement proceedings. Accordingly, the OAG anticipates litigation in this matter,’ it added. 

Consumer protection law in Texas works to catch practices by companies that are deemed false, deceptive or misleading.

It is not clear what Apple practices are being investigated.   

The office of the Texas attorney general has declined to comment. 

A spokesperson told Axios it had a ‘long-standing OAG policy’ not to ‘comment on, confirm or deny any pending or potential investigations’.

The statement came despite the state’s public role in a similar probe into Google.  

Apple did not immediately respond to a Reuters request for comment. 

According to Axios, the Tech Transparency Project received the document after a request for communications related to Apple or with Apple employees or representatives. 

The company is already facing antitrust investigations from the U.S. House and from the European Union.  

On Monday, the CEOs of Facebook, Apple, Amazon, and Google will testify before the House Judiciary Committee at the end of a month-long investigation into whether the tech companies misused their market dominance to unfairly stifle competition.

It is investigating whether the companies have accumulated so much power that it is impossible for smaller competitors to gain a foothold.  

Apple has also faced class-action lawsuits from consumers alleging that it deceived them about slowing the performance of iPhones with aging batteries. 

The company agreed to pay up to $500 million to settle one such lawsuit earlier this year.

It is also facing lawsuits alleging that it knew and concealed how the ‘butterfly’ keyboards on its MacBook laptops were prone to failure.  

Equity markets had been trading slightly lower before the Apple news Thursday on concerns about labor market weakness due to the coronavirus pandemic and deteriorating U.S.-China relations. 

Along with Apple, Microsoft,, Facebook and Google parent Alphabet all tumbled. 

The five stocks account for 22 percent of the S&P 500’s market cap and have returned about 35 percent this year, compared to a 5 percent decline for the remaining stocks in the benchmark index. 

It comes as states step up their scrutiny of big tech-companies. Google and Facebook have also faced multi-state antitrust probes.  

The Justice Department is also considering an antitrust suit against Google, and Amazon and Facebook are currently being investigated by the Federal Trade Commission. 

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