Following reports that the U.S. Department of Justice (DOJ) is preparing to sue Apple (NASDAQ:AAPL) as soon as Thursday, analysts at Wedbush said they do not expect any business model changes for now, but they believe Apple will eventually have to find a way to settle this case.
Wedbush, which maintained an Outperform rating and $250 price target on Apple, said it believes the iPhone maker may have to pay a hefty fine and ultimately find some compromise with developers on the App Store structure down the road.
The reports state the DOJ could be set to bring about an antitrust lawsuit against Apple for allegedly violating antitrust laws by blocking rivals from accessing hardware and software features of its iPhone.
"This clearly escalates the Biden Administration antitrust efforts against Big Tech giants and adds to the current ongoing antitrust case against Google and other various cases against Meta and Amazon," said Wedbush.
Analysts noted that while the DOJ has filed three suits against Apple in the past 14 years, this would be the first case of going after the tech giant's dominant position and core business model with the iPhone and its App Store ecosystem.
"This DOJ suit will likely take years in the courts to litigate and ultimately lead to a trial vs. Apple," added the firm. "The DOJ antitrust case is a serious matter that has taken years to build and they are clearly aggressively heading down this collision path with Cook and Cupertino."
"We do not expect any business model changes for now," said the firm. "The headline risk is added to the Apple story as this case will not be resolved in the short term and Cupertino will be under a further microscope both in the Beltway and Brussels as well as other Big Tech stalwarts caught in this complex spider web."