Analysis
Market Tipping
Over the past decades, several markets have shown signs of developing into monopoly-like structures without exhibiting all the typical characteristics of classic monopoly markets. This development, where one or a few firms end up winning the market, is referred to as market tipping.
The Danish Competition and Consumer Authority has examined why some markets tip, and which market conditions and characteristics are at play. Market tipping is particularly evident in markets where digital platform services – such as online marketplaces, search engines, social media networks, web browsers, or operating systems – play a central role.
The DCCA has examined the concept of market tipping in the context of competition law, drawing on academic literature, case law, and concrete case studies. This report explores the market factors that contribute to market tipping and proposes a framework for assessing whether a market has, in fact, tipped - or is at risk of tipping. The framework is applied in five case studies, each examining the state of competition through the lens of the identified tipping characteristics.
The analysis shows that market tipping is largely shaped by demand-side dynamics, where a competitive and contestable market shifts into a “winner-takes-all” scenario. In such cases, one or a few firms achieve dominance and face very limited competitive pressure. This process is driven by multiple factors with network effects being essential in creating a self-reinforcing cycle that makes it increasingly difficult - or even impossible - for competitors to offer viable alternatives, attract customers, and challenge the incumbent firm.