[try_the_bass]

Economics 101 also assumes perfect information symmetry, perfect competition, and spherical cows. In other words, it only vaguely models reality... Good enough to teach the basic concepts, but without diving in the nuance that makes the basic models break down.

If one competitor is far enough ahead of the rest, they can maintain that lead given that they can extract sufficient momentum from their early mover advantage. If they keep this up long enough, competitors never reach the scale to sufficiently prevent them from becoming a monopoly (at least over their local market segment).

None of this requires anti-competitive behavior; simply good execution on the part of the leader.

Unless, of course, you're suggesting that "free markets" also involve government intervention to suppress their lead in the market...