Nothing is stopping you and your three friends from running your own SMTP servers and emailing each other.
As soon as you want to do business with Outlook's customers, you play by their rules.
As soon as you want to do business with Outlook's customers, you play by their rules.
"They're allowed to do it" is one of those things that doesn't really bear saying so much because that's already been implicitly established. Nobody is claiming what they're doing is illegal, so how does this add anything of value? Who is still unaware that corporations will use their size and market control to their benefit?
"Their rules" seems to be turning into "you spend money to another corporation that we trust".