Features of Competition in the Context of Digitalization of the Economy

Abstract

Dynamic changes in the market bases of the economy under the influence of digital technologies are displayed. Logistics, minimizing transaction costs, speeding up the process of circulation are the benefits that the digital economy brings. All these factors coexist with a number of serious threats. Digital formalization and desocialization of economic activity, concentration of information power and increased consumer manipulation lead to a fundamental social uncertainty. Institutional changes are supposed to remove growing uncertainty and risks by ensuring the safety and freedom of consumer choice. The changes in the list of the world’s largest companies by capitalization since 2008 illustrate the growing importance of the high-tech industry on a global scale. The article shows the tendencies of formation of the market imbalances in the market shares of players in certain areas of the digital economy, and provides examples of expanding the scope of presence through the acquisition of smaller start-ups with significant innovative potential. Removing the uncertainty of socio-economic development as well as reducing gaps due to incomes or education lies in the plane of social control on the part of society over the dynamic technological and economic changes. Only a mature society is able to form the quality of the institutional environment in which it becomes possible: firstly, to extract the maximum result from modern technologies; secondly, to distribute it on the fair basis; thirdly, to keep a person’s habitat comfortable for his life. The digital economy should serve human development and well-being, not virtualize a human and subdue him the newest technology. Formation of new institutional mechanisms to counter unfair competition were needed, which would be the prospect of further research into the problem.

Keywords

• digital economy
• competition
• economic power
• institutionalization
• digitalization