Research on Unfair Competition in the Digital Economy: Innovation, Regulation, and Balancing Strategies

City University of Macau, Macau, China

^* Corresponding author: 13969300311@163.com

Abstract

Online unfair competition is on the rise, disrupting market order and violating consumer rights in the context of the fast developing digital economy. Therefore, the purpose of this essay is to investigate the nature and forms of unfair competition in the internet economy and how it affects innovation. In addition, it examines the shortcomings of the existing regulatory frameworks and suggests balanced approaches and effective techniques to encourage the digital economy's healthy expansion. Defamation, misleading advertising, and web crawlers are common examples of unfair competition on the Internet. Another kind of unfair competition is data mining, which involves acquiring rivals' customer information or trade secrets. These behaviors not only undermine the principle of fair competition in the market but also mislead consumers and harm their interests. There is a certain relationship between unfair competition on the Internet and innovation. On the one hand, unfair competition on the Internet may stem from companies' excessive pursuit of innovation. To stand out in fierce market competition, companies may resort to unfair means to gain competitive advantages. On the other hand, unfair competition on the Internet may also inhibit innovation, as companies may reduce their innovation investment due to concerns about competitors taking unfair measures. The current regulatory mechanism has certain shortcomings in addressing unfair competition behavior on the Internet. On the other hand, the regulatory mechanism's definition of unfair competition on the Internet is not clear enough, which makes it difficult for regulatory agencies to accurately judge and handle it in the law enforcement process. At the same time, the regulatory mechanism's punishment for unfair competition on the Internet is not strong enough to effectively deter illegal behavior. To address unfair competition on the Internet, it is necessary to establish effective regulatory mechanisms and balance measures. Firstly, it is necessary to clarify the definition of unfair competition on the Internet and establish specific regulatory rules and standards. Secondly, it is necessary to strengthen the enforcement efforts of regulatory agencies, increase the severity of penalties, and ensure the effectiveness of regulatory mechanisms. At the same time, it is also necessary to strengthen corporate self-discipline, promote compliance with market rules, and jointly maintain market order. In short, unfair competition on the Internet has had a negative impact on the development of the digital economy, and it is necessary to establish effective regulatory mechanisms and balance measures to promote the healthy development of the digital economy.