If companies get large enough, you no longer have a free market. You simply have a company so dominate and powerful, they can undercut any new company or product. Not on merit or offering a better product. Purely based on size and its entrenched position.

Let's say company A is monopolizing a market. New company B finds a way to make company A's product providing exactly the same value, except half as expensive. A healthy market would reward company B and consumers both by allowing that innovation to spread, providing a return for those that invented it and a cheaper product for consumers, leading to greater prosperity for society. However, in the market you speak of, company A can simply use their orders of magnitude more wealth to undercut company B for a time until they go bust.

What incentive is there to innovate, to improve, in a market that doesn't reward it?