This is a pattern we have seen time and again. Describing this as "about as far away as you can get from capitalism" is the no true Scotsman fallacy. Perhaps it doesn't match how you believe capitalism should work or you have a very different definition of capitalism to the more regular meaning of the term.
Cartels are only a problem if no new suppliers can enter the market.
> lobby for regulation
This is a problem of any representative system. Convince them and you're set. No capitalism involved.
> crush competition
Just a consequence of the abovementioned.
Summary: step 2 is the crucial problem, it's usually corruption or idiocy and a governance problem - not a capitalist problem.
If capitalism is only capitalism when there is no conglomerated power structure then capitalism is impossible.
Often enough today its the left who are defenders of capitalism (ie., of disentangling power structures from coporate control) whereas the right seems possessed by the idea that whatever a company does is by definition captailism.
Capitalism was all about recognizing that business interests are anti-capitalist.
It seems pretty obvious that, if your aim is to accumulate capital, regulatory capture is a pretty damn efficient strategy as compared to marketing or product development. It's also efficient for the government official, who gets to sell access to regulation processes (an otherwise difficult-to-sell service!) at market rates.
(Not that libertarian-style "OK, let's get rid of governments!" approaches are a good solution here. In that case, the optimal strategy becomes force, which in effect establishes a government of sorts.)
Going the other direction you can have a big government with extensive powers that tries to force fair play through extensive regulation, as ours does. But this has been tried over and over again, and it invariably trends towards corruption. I think that particularly in a democracy, this outcome is going to be quite difficult to avoid. It seems that these basic facts should be the starting point of discussion, as opposed to the point where people have long since splintered off and polarized themselves towards opposite extremes.
But it ain't "free enterprise" whenever regulation limits consumer choice and market entry by competitive participants.
