I always think this kind of "free market" thinking is spoken by people with an incredibly narrow world view.
You, personally, might be aware of all the evils and ills to which these companies subject their users, but the average consumer is blissfully ignorant or simply doesn't care.
You might be educated or enlightened enough to be aware of the risks these services pose, but again most people aren't. Is the average WhatsApp user (especially in the huge markets such as India where people are generally poorer and less highly educated) really going to care about the implications of privacy policies etc.?
Those users aren't even going to think about switching to a competing service because (e.g.) all their friends and contacts use WhatsApp.
When a company gets as big as Google, Facebook, etc. then competition starts to not matter and that's why the "free market" idea holds zero weight.