Buying out maybe, but that only exacerbates the problem for the company in the long run. Regulatory capture is what actually works, but not within the libertarian framework, because regulation again is not a market mechanism, but government intervention into the market - exactly what libertarians say we should have less of in the first place.

Mind you, not different, or "better" intervention, but less, or even none at all. One could argue the point about libertarianism is that you can't trust the government to do a good job because it is based on force, and not voluntary market interactions, and hence lacks the proper incentives. It's just a bunch of guys on a spending spree with other peoples money, and their incentive is to make as much of it as humanly possible land in their own pockets.