Barclays: Apple may suffer "collateral damage" due to the U.S. Department of Justice's antitrust case against Google
Barclays Bank stated that if the U.S. Department of Justice's antitrust lawsuit against Google continues to develop, Apple may suffer "collateral damage." Analyst Tim Long pointed out that the traffic acquisition cost revenue that Google pays to Apple may be affected, which is expected to account for 15% of Apple's operating profit. The analyst has given Apple a "reduce" rating with a target price of $184. Although initial data is unfavorable for Apple, it may compensate for losses through advertising revenue in the future. The lawsuit may take years to resolve, and risks still exist
According to the Zhitong Finance APP, Barclays Bank stated that if the U.S. Department of Justice's antitrust lawsuit against Google (GOOGL.US) continues to develop as it currently stands, Apple (AAPL.US) may ultimately suffer "collateral damage."
Last week, the U.S. Department of Justice formally requested that Google divest its Chrome browser. Court documents show that the U.S. Department of Justice is asking the judge to rule that Google should divest its Chrome browser and be prohibited from re-entering the browser market for the next five years. The U.S. Department of Justice also requested that the judge order Google to divest its Android operating system if other remedies fail to restore competition. Additionally, the U.S. Department of Justice is seeking a court order requiring Google to distribute search results and information to competitors over the next ten years.
Furthermore, the U.S. Department of Justice is seeking to stop Google from paying Apple billions of dollars to ensure it remains the default search engine on Apple devices; it seeks to prohibit Google from acquiring or investing in any search competitors, query-based AI products, or advertising technologies. Google stated that the Department of Justice's requests far exceed legal boundaries and would harm consumers, developers, and the technological leadership of the United States.
Barclays Bank analyst Tim Long stated, "Although Apple is not directly involved in the legal dispute between Google and the U.S. Department of Justice, the outcome could have significant implications for Apple's model." The analyst pointed out that the traffic acquisition cost revenue that Google pays to Apple could be affected, which is a major issue for Apple, as it is believed to account for about 15% of Apple's operating profit. The analyst has given Apple a "reduce" rating with a target price of $184.
However, the analyst added, "While the initial data is quite unfavorable for Apple's revenue and earnings, the situation may change, and over time, Apple may compensate for the loss of revenue with its own advertising stack." The analyst also warned that although the lawsuit may undergo years of appeals and take years to resolve, there are concerns that, given "the lack of substantial disclosure regarding this business," this proportion could be higher