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Consolidation is the natural tendency of all businesses, independent of regulation. Powerful businesses may capture regulation to further entrench their consolidation, but don't confuse cause for effect here. Regulatory capture doesn't happen until after you have a powerful enough cartel to start buying politicians.

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Regulations usually carry a fixed cost, regardless of scale, so the easiest way to reduce their impact on margins is to consolidate. Big businesses are often in favor of regulations because they create moats which small businesses cannot cross.

Spot on. Also worth noting that regulation and government administrative law are the only ways to restrict consolidation. (Anti-trust, FTC merger approvals)

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