It's obviously a fuzzy scale.
In a free market like that it's not guaranteed that everything ends in monopoly. Actually mostly it won't. Monopolies that do occur are due to high costs of entry and are usually temporary.
Basically free market advocates fail to see more that a single step in the complex web of dependencies, which tries to prevent neo-feudal monopolization of everything by unchecked, unelected and being above most laws and taxes, robber barons.
I dislike unnecessary bureaucracy and excessive government control as much as anyone, I was born in the authoritarian USSR after all and I do study history. But I fear neo-feudalism even more. I certainly have zero self-delusions about being in a "ruling class" in that potential free market dystopia.
And the effect by which regulation actually strengthens incumbents and reduces competition is well known.
A common problem in these discussions is conflation of different goals. You talk about companies selling "poisonous shit". That's not a competition related goal so has nothing to do with anything I've been saying. It's an environmental goal. Governments often pass environmental law fully accepting that it will reduce competition and might strengthen or even create new incumbents - and they don't care! In fact most environmental law is like that because it's exactly as you say, other countries like China don't pass such laws and out-compete local firms as a consequence.
But that's not a failure of the free market. It's a failure of environmental law. Or, sometimes not even a failure, just a known tradeoff.
As a general rule it's hard to find markets that are controlled by monopolies over the long run without government regulation being to blame. Temporary monopolies can arise naturally and there's nothing wrong with that, but over time they usually fall by the wayside unless a law is preventing that from happening.
