Apple Inc (NASDAQ:AAPL, ETR:APC) is reportedly set to be hit with an antitrust lawsuit by the US Department of Justice as early as Thursday, which analysts say will ultimately result in a fine.
Though the case will likely take years and eventually see Apple defend itself in a trial, Wedbush warned some sort of settlement would have to be sought down the line.
“The DOJ antitrust case is a serious matter that has taken years to build,” the bank wrote in a note.
“They [the Biden Administration] are clearly aggressively heading down this collision path with [chief executive] Tim Cook and [Apple headquarters] Cupertino.”
That said, Wedbush acknowledged Apple had defended its App Store, ecosystem and fees charged to developers repeatedly in European courts.
“We would expect a similar battle here,” analysts added while maintaining an ‘Outperform’ rating and US$250 share price target, which is up almost 40% on Wednesday’s close.
The Justice Department’s case is set to relate to Apple’s blocking of rivals from iPhone hardware and software features, according to Bloomberg, suggesting it has illegally maintained market dominance.
This follows two other Justice Department cases against Apple in the last 14 years, while Fortnite maker Epic Games sued the technology giant for monopolisation in 2020.
“We do not expect any business model changes for now, but Apple clearly is going to have to find a way to eventually settle this case, pay a hefty fine, and ultimately find some compromise with developers on the App Store structure down the road,” Wedbush added.
Apple shares slipped 1% to US$176.80 in pre-market trading.