Abstract: Purpose/Significance The digital economy, which is based on the internet and has spread and penetrated into the economic field, is closely related to the mindset, preferences, perceptions and utility expectations of individuals, manufacturers and governments, as well as the corresponding supply, demand and price formation, etc. The formation and development of the digital economy can be explained by using the basic theory of economics. Design/Methodology Firstly, the theoretical basis of the expansion of the Internet on the digital economy to change the decision-making behavior of subjects are sorted out. Then, mechanism of the impact of the operation of the digital economy on changes in industrial organization are explained. Conclusions/Findings On the basis of distinguishing the differences between the concepts of digital economy and digital economy operation, an economic explanation of the Internet, digital economy and industrial organization changes is given, a general picture of investment, production and consumption behavior in the context of digital economy is sketched out with digital economy operation as the main line of analysis, and the issues that need attention in subsequent research are discussed.