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Worst case scenario is that the private's solution is too good and the state thus regulates the private competition to be as bad as the public.

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Do you have some examples? I can only see the obvious extreme example of communism, which forbade private competition at all.

But I am not clear who (which party) would push for such a regulation. The benefit to the public is obviously bad, and the private industry would certainly oppose it.

I am thinking of Outbox, a former US tech startup that digitalised mail, and that was shut down by the U.S. Post Office.

I have the opposite example. In the Czech Republic, the national railway was sued by the private railways for being too cheep. And the private railways won in court!

Similarly: in Germany you used to bed able to watch the entire back catalog of public broadcasting companies. They got sued by private broadcasters and now are only allowed to show two weeks back. I think it's ridiculous, since the tax payer paid for and owns the content.

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