>"free" and "free of governmental interference" are not the same thing.
Since "free" in this context means absence of coercion against extant or would-be competitors, and since government regulatory efforts are a source of such anti-competitive coercion, unless one is concerned with firms sending hit squads against each other (which would more rightly be considered "crime"), the distinction isn't particularly useful.
If it is voluntary it is not coercive. You can always not deal with your competition on unfair terms. In what circumstance could a 3rd party non-violent entity coerce you? The biggest one I can think of is "buying you out" but that is still either voluntary, in that the owners agree on the buyout, or it is a buyout of a publicly traded company, and I can't even get started on how non-free market the stock market is, but even then you elected to sell ownership in a public marketplace voluntarily and took that risk.
> Offering a lower price to consumers than your competition is not coercion against a competitor.
It is if you are offering a price lower than your costs which you offset by cash from earlier deals, which the new upstart cannot do. When the new upstart is bankrupt you push the price higher, because now there's no competition anymore. That's the reason such stunts are forbidden (at least in civilized countries).
If you can't profit off an enterprise, then there is not enough demand to justify your existance. If the market leader is going to undercut you to drive you out of business to then jack up prices to exploit consumers, assuming no artificial barriers to entering the market occur (mostly legal exploitation) or the price to entry is not too high, then as soon as they up their rates they reopen territory for competitors to arise.
In the end, if the market leader is constantly crushing competitors through undercutting to maintain their position, they are not really exploiting their customers at a monopoly and its a market win. It is still competition - the leader just moves to eliminate competition (which would piss off shareholders or anyone in general with a long term outlook on the company) rather than compete against it. As long as they cannot stop competition (and in a voluntary fair system, they cannot) then they have to deal with it one way or another.
Since "free" in this context means absence of coercion against extant or would-be competitors, and since government regulatory efforts are a source of such anti-competitive coercion, unless one is concerned with firms sending hit squads against each other (which would more rightly be considered "crime"), the distinction isn't particularly useful.