Depends, what you described in democracies is called "regulatory capture" and is usually only possible because politicians have a tendency to regulate and then rely on existing big players to find a regulation consensus.

Notably absent of those advisory boards are non-existing future companies. It's relatively rare for regulation to kill off businesses in democracies.. at most it's to boost barriers to entry.

In China and Mexico where the rule of law is selectively applied, incumbents do kill competition outright.