Monopolies

I consider the case of Qualcomm faces antitrust probe in china. Qualcomm Incorporated is an American global fabless semiconductor company that designs, manufactures and markets digital wireless telecommunications products and services. In the article it states that Qualcomm is the world’s biggest makers of cellar phone chips so they wanted to merge companies with china due to the potential market growth china has compared to the United States. So the speculation of this deal is that the company in china and qualcomm plan to do a launch of TD-LTE by early 2014. This causing an issue simply because it seems as though they broke the antitrust violations; in the article it does not say what violation it is but my thought from reading it would be the Celler-Kefauver Act which states that the Clayton Act, Section 7, which prohibits a firm from merging with a competing firm (and thereby lessening competition) by acquiring its stock. The issue seems to the rise of a company in which other companies would suffer from the merge taking down competitions and so forth. From the article we can tell that with any company trying to succeed in the business world especially a company that makes cellphone chips comes into a merger with china then the production and economic profits is unimaginable. China is one of the world’s leading productions in products worldwide now combing that with the cell phone chip makers, no other company would dare go against them or even try to keep with the company. The Marginal Revenue or Marginal Cost will skyrocket in competition. If the merger occurs it would call a Deadweight Loss to Society meaning that the costs to society created by market inefficiency and loss occur when supply and demand are not in equilibrium.
Did not formally state why the company was being investigated but some say it is because of an attempt to gain leverage in royalty negotiations with Qualcomm ahead of the expected rollout of new 4G wireless infrastructure in 2014. The