Multiple government agencies have a gap in capability. Larger government body chooses to leverage a popular (private) company Z solution over trying to develop an internal system. This is often because it's already been done in smaller jurisdictions. Z becomes head of agency/regulatory capture cartel. Z abuses the position to curtail the government actions/enable further corruption/abuse.
As another (dead) comment mentions in this thread, FUD is a survival pattern for these picked winners to try to keep profits high: https://youtu.be/EozPi1qmH44?t=97