Once you buy a smartphone today you and everybody who wants to do further business with you are at the mercy of a monopolist. For Apple 100%, for Google only 98% because you could side-load. But not a secure and practical solution today.
Combined with the "must be very big" requirement it better fits what is going on in the tech world.
Yes, you have a choice once every couple of years while you might want to install an app several times a year. Free markets would also be the wrong word to describe the situation.
Decades ago people were crying out against it, but nobody with power listened because they thought we just wanted to steal music[0]. Well, we did, but that didn't make us wrong. Now the world economy is owned by a handful of oligopolist-elected dictators who have maximally exploited the laws in question to make meaningful competition literally illegal.
No, seriously, try and ship a phone without big tech's blessing. It won't work. Hell, Amazon and Microsoft both tried and failed. Everyone only writes apps for Google Play and iOS, and any attempt to make them work elsewhere is a criminal felony.
[0] To be clear, their real concern was finding ways to legally bind China to pay us for "our IP" on pain of being shut out of world markets. Dictatorship is fractal.
Why can I run code Apple loathes on my Mac ?
A customer is only looking for either iOS or Android apps, and isn't going to choose an Android app if they have an iPhone, or vice versa (IOW, iOS apps don't compete with Android apps).
Imagine only one company sold diesel fuel, and only one sold gasoline. Wouldn't you say they each had a monopoly?
The DMA was always phrased from the wrong perspective (which is just classic EU, they literally cannot ever get regulation right). The correct phrasing is: once a computer operating system achieves a certain level of market adoption (say, 50M+ active installations), it is designated as a systemically critical operating system. Among other regulations, one thing systemically critical operating systems must allow is the independent and unrestricted installation and execution of applications from the internet.
Regulating the market (App Store) itself is just dumb. Apple should not be forced to have Epic Games as a customer. It destroys trust in the App Store's review process, and legitimately does from my perspective infringe on Apple's rights as a business to do business with partners as they please. There's a gulf of difference between "forcing the App Store to distribute some application" and "allowing that application to be freely distributed on the internet". Regulation should be specifically targeted toward the second situation; and leave the App Store alone.
It is Apple who decided that third-party software distributers must comply with certain restrictions, and must sign a contract with them.
And it was Apple which tried to prevent Epic from signing that contract, and who's now backtracking… before it's forced to do so by the EU.
Android allows the installation of alternative app stores but Google still retains large effective control over the app market.
I would argue that the EU recognised that and therefore regulated Operating systems and app stores because the former one isn't enough apparently.
If things continue along this trajectory we may see the utility argument at the store level and at the OS level.
Looking at how the electric power distribution industry is regulated it already works like this (at least here in Germany).
On the one hand grid operators are heavily regulated (as you say) and must allow companies without infrastructure to resell power to end customers.
On the other hand the actual owner of the last mile infrastructure is also forced to do business with all customers and has very little freedom to refuse(e.g. non-payment is a temporary valid reason).
We may very well see something similar in the software distribution market since it's becoming such an integral part of life.
