You’ve just made the core argument of anti-trust legislation, which is far broader in scope than discussion of monopolies and far subtler. At root, monopolies are easy to detect, and it follows fairly uncontroversially from basic economics that’s been agreed-upon for centuries that if there are no (potential) competitors than there is no competition, rent-seeking/profit-gouging behaviour ensures by the incumbent, and capitalism basically dies. Anti-trust, however, it a great deal less clearly defined.

Let’s imagine a firm, and let’s call it Adobe. Adobe makes Photoshop. Photoshop has a full set of features and is sold for a high price to a market segment comprised of professional users who need the features provided by Photoshop, and are happy to pay the price since it enables them to make a decent living even once the cost of the tool is deducted. Adobe gets a decent revenue that allows it to cover expenses, capital costs, and develop future versions.

On the other side of the spectrum, you have Microsoft. Microsoft ships Paint for free. Paint has very few features, but it covers some (mainly ironic) usage cases, and it gets used by those who wish to manipulate images but have no need for the complex features of Photoshop. Sure, some people who wish to do high-level image manipulation but cannot afford Adobe’s asking price for Photoshop are not well-served by this arrangement, but hardly anybody would argue that Microsoft’s inclusion of Paint would be anti-competitive towards Adobe: it’s not worth adding all the features of Photoshop to Paint only to give it away for free (and the argument that you would give it away for free only long enough to bankrupt Adobe and then start charging for Mega-Paint might be profitable, but it’s uncertain and depends on costs of capital and expected rates or return, plus the costs of an almost certain lawsuit).

Nor can Adobe be anti-competitive against Microsoft: dropping the price of Photoshop to zero just to stop people from using Microsoft’s own free product would be... pointless as it would zero their revenue.

These are two extreme cases, and it’s easy to just think in these dualistic terms and come to the wrong conclusion (or wonder what I’m getting at with this bizarre and apparently off-topic rant).

Now to tie it all together, introduce a middle-ground player such as Affinity. Affinity makes Photo, a product that is midway between Paint and Photoshop both in terms of price and features. People who need the full features of Photoshop (including those not present in Photo) will still choose Photoshop, which might slightly dip Adobe’s revenue. Microsoft’s will however remain stationary at zero. Affinity has captured the market of those who are defined by Paint being unsuitable but who do not wish to pay Photoshop’s full price (because Photos contains all the features they need).

Now, finally, the final step: say Adobe turns a blind eye to piracy of Photoshop. It still gets paid by its professional customers so it’s revenue remains unchanged. However, people who found Paint to be frustrating are now faced with an interesting choice: steal Photoshop (which has all the functions they could possibly want, and is free) or buy Photos (which has all the functions they want, albeit a subset of those offered by Photoshop, but does so for a higher price).

This is one obvious case that comes under the broad rubric of ‘dumping’ (selling at prices that damage one’s own short-term interest in order to damage one’s competitor and increase one’s net long-term advantage) but there’s plenty others where that came from. The tech industry is rife with them. Mainly, lack of successful prosecution is probably due to regulatory capture by way of lobbying.