These problems always exist. "Free market that corrects itself" is nothing but a thought experiment. Additionally, the whole idea of such a market directly comes from an era when one person or a small group of people could potentially compete with anyone and everyone else, that is, from before industrial revolution.

And here's why:

- the main problem is that in a free market the only measure of success is profit. It has nothing to do with "whoever has a better product will win". A "better product" doesn't necessarily mean "better profits" or even "any profit at all".

- free market assumes that everyone will be free to compete, free "from all forms of economic privilege, monopolies and artificial scarcities". This fallacy assumes that humans don't exist. That they won't create monopolies, give money and capital to the people they want to (thus creating economic privileges) and deny goods to whoever they want (thus creating scarcities).

- free market assumes that all markets are created equal, and that all markets are driven by supply and demand. This is not so. We don't have infinite resources. We don't have infinite demand for those resources. Many markets are inelastic. Many markets are not even markets at all. Cancer patients are not a market, for example. And if they are treated as such, you end up with people dying, because the drugs are costly, their supply is (or will be artificially) constrained, and the demand for them is high.

- free market assumes that any new product or innovation can be made instantly or nearly instantly available by whoever came up with this product and they will be free to compete. And that it's equally easy to come up with a competing product anything that exists. This not only ignores fundamental rules of physics, biology, chemistry etc. It also ignores the complexities of modern life. "Oh, it's simple to solve the problem of a monopoly: all we have to do, as a community of thousands of developers, is to find billions of dollars and create a competing product in the next 10 years. Easy". And while we're at it, we can also go ahead and quickly create an alternative chemical reaction to produce vitamin C because China has a monopoly on it. And so on.

- free market assumes that all knowledge there is is instantly available to everyone and everyone can just build on that knowledge. Even though companies routinely create and protect trade secrets. And if you want to try and create something similar, you have to spend an insane amount of time and resources retracing the same steps and reverse-engineering stuff. Can anyone recreate Apple's A-series chips? No, not anyone. Maybe one or two companies in the world at the cost of billions of dollars and 10 or so years. And they would have to go through many of the same steps that Apple has gone through. And while they are doing that, Apple will have had 10 more years to improve stuff. And a lot of that work depends on other trade secrets like CPU manufacture that another monopoly/duopoly will or will not be willing to provide to you. And a lot of that stuff is undoubtedly relying on a lot of knowledge that's in the public domain precisely because of copyright laws.

And finally: the reason so many government regulations exist is because free market failed to find solutions that don't result in life being a misery:

- food and drug safety? Free market had no qualms of selling contaminated drugs for children: https://en.wikipedia.org/wiki/Jim_(horse) and so no need in testing food and drugs

- labor laws? Free market has had no qualms of working people to death for 15 hours a day with no days off and saw no problems with that

- free (as no pay) education? Free market had no qualms with only the rich getting proper education (what happened to "free from all forms of economic privilege" huh?)

- public services such as police and fire departments? Free market had no qualms about letting private fire brigades fight each other and protect only those who had enough money to pay.

- and the list just goes on and on and on. Minimum wage, polluting rivers (Cuyahoga River), exploding cars (Ford Pinto), health (tobacco), ... Until governments intervened, free market was more than happy with the "solutions" it came up with.