The real question is, does capitalism just inevitably end up in coporatism?
I think true capitalism can't arise in a vacuum; it needs a regulatory support structure for enforcement.
This is obviously false, both from a logical and historical view.
A monopoly cannot exist in a free market as no company, no matter how successful, can actually restrict entry into any given market without the government banning entry into that market. This is accomplished though various legal means including licenses, trade barriers, so-called "intellectual property" protections, and other tactics. Without the barriers for entry into any market provided by government, establishment of a monopoly on any desired service would be impossible.
Now, you might cite some historical examples like Standard Oil and the like as examples of why monopoly protections are needed, but this standard example only illustrates my case. The price of a gallon of oil, for example, was around 30 cents in 1870 and fell to around 6 cents at the time of the anti-trust trial. And their market share was continuously dropping despite their supposed monopoly.
A natural monopoly can and ought to be defined as an entity with monopolistic market share achieved WITHOUT government regulation, subsidies, and the like, AND WITHOUT the illegal use of physical violence.
This is a good rule of thumb to determine whether a market is free. So, for example, in the US, the high tech hardware and software markets are free (prices are continuously dropping) while the higher education market is not (prices go up every year.)
It is unlikely that google would loose such position until there is an advance or breakthrough. Until then, google can do quite a lot and pretty much whatever it likes if there were no laws constraining it.
Let's take one specific example, though the principle can be applied to most industries: child car seats. Presently, govt regulations require very specific quality and manufacturing standards and thorough testing before a child safety seat can be sold on the market. Without those regulations in place, how man children need to die before third party organizations can disseminate product failure information wide enough that the responsible company suffers the consequences?
cf. The Value of Nothing by Raj Patel in which he makes the point that we all agree as a society how trade is conducted, and we can agree to do it one way or another way. For example we now agree humans can't be sold and that land can, but at other times the reverse was the case.
Trade does not happen in a social vacuum.
(Politicians were really corrupt back then. For example they would commonly threaten to pass nasty laws to mess up railroads just to get bribed to stop. It's amazing how bad it was, and how far we've come that today's politicians aren't so corrupt like that (partly the change is due to technology making it harder to hide what you do)).
Who watch the watcher? How those watcher of watchers determine if the watcher in question is doing its job?
There's an unfair amount of blame on the corporate end of this conflict, when the fact is that nothing of this could happen without willing politicians.
Capitalism: People are free to buy and sell their own property as they see fit. This necessarily implies people have enforced property rights. In other words people with economic freedom are practicing capitalism.
Corporatism: Groups of people organize (into corporations) in order to advance their interests (usually to make a profit). One way to advance their interests is to push for laws and regulations that favor themselves at the expense of others.
So in the United States we have a constitution designed to protect freedom from people who are trying to favor their own interests. Now we're all involved in both sides to some degree or another. I want freedom to do whatever I want. I also want restrictions on your freedom to do whatever you want to do to me. Where do we end up? Well we never end up anywhere, we just keep changing what the limits of our freedoms are. Human nature being what it is, given the opportunity we push for personal benefits at the expense of others freedoms - Corporatism.