> then Company C shows up and starts finding success doing 100 harm to Area X, so Company A changes it's moral stance to "unless we do 99 harm to Area X ..."

I mean yes this is technically possible. But I think in many cases, especially "winner-take-all" markets like online search engines, social networks, etc., you don't get this large number of repeated threats. Fending off a competitor or two might be enough. And just as it's possible for there to be some advantage that opens from doing 99 harm to Area X, it's also possible that it never happens.

But also, let's pretend the hypothetical you say _did_ happen?

What should occur? Should the company just NOT do 99 harm to Area X and instead allow 100? If so, why? Unless you break the hypothetical by adding some alternative option C, as much as we don't like the preventative-99 option, it's still better than the allowing-100 option.