CNN Business: Google Paid $26 Billion to Remain Default Search Engine

Article published: October 27, 2023

IB Economics Syllabus: Microeconomics (market structures, monopoly power)

Google’s strategic move to spend $26 billion in 2021 to maintain its status as the default search engine on various devices and browsers highlights its dominance in the digital market. This financial commitment, particularly to companies like Apple, underscores Google’s efforts to sustain its market position and influence in the tech industry.

IB Economics (IA) Commentary Suggestions:

In your IA, consider analyzing Google’s market strategy within the framework of market structures, focusing on monopoly power and barriers to entry. Utilize diagrams such as the Monopoly Diagram (illustrating the market situation where a single firm dominates) from the IB Economics syllabus. Discuss the implications of such a dominant market position on competition, consumer choice, and market efficiency. The key economic concept to focus on is intervention, examining how regulatory measures could impact Google’s market dominance and the overall health of the tech industry or efficiency as considerable monopoly power can lead to allocative inefficiency. Consider the broader economic implications of such strategies on market innovation and consumer welfare.

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