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Synthèse
James Tierney (Partner, Orrick) opened the discussion by defining tipping and explaining its effects : the disproportionate selection by customers of the firm’ product and the emergence of the firm as a de facto standard. When market tips, the winner takes all. Market power then allows the firm to price above competitive levels or engage in other anti-competitive behaviour. That power can be durable. The market is unlikely to self-correct and self-regulate, even if a better product emerges. Mr Tierney then invited the panellists to focus on the characteristics of tipping markets and the public policy implications of market tipping. He stressed that digital transformation is spreading across the most traditional industry segments, which Google’s acquisition of Nest, a manufacturer of digital thermostats, indicates, as well as the evolution of AmEx or JP Morgan Chase’s business models to leverage network effects using data analytics and connected services.