Every decision about what to enforce and when has a set of competitors that benefit from that decision and a set of competitors that are disadvantaged from that decision.

And over time even a single, small benefit can be enough to guarantee a specific rational actor will win out over its competitors.

Certainly not in all cases, but if the issue you have is that individual decisions aren't enough to pick a winner, no matter how large/important, then change the last paragraph to

>>> And of course, every decision made for how to implement the kinds of issues outlined in the above paragraph is an opportunity to pick whom to give an advantage over their competitors, too.

And this doesn't even begin to consider the issue that since the mechanism for making and enforcing the rules exists within the system of rules it creates, both fostering competition and enforcing a free market give opportunities for competitors to buy rules and/or enforcement of rules that benefit them at the expense of competitors, either directly or indirectly.

It's possible, but I'm still not sure I buy into the idea that a given decision that might result in someone failing is picking winners exactly.

I can say in a given industry they can't pull some bait and switch... a company that relies on that tacit could go out of business, is that picking winners or regulating poor behavior?

Like anything working to maintain some level of competitiveness would be like hitting a moving target, you'll have to change what you do, address barrier of entry issues one day, who knows what next.

In the extreme form of a free market (some would call that 'in a truly free market'), there is no such thing as regulating out bad behavior because, that is a limitation on actors' freedom within that market. As the view goes, even if everyone in the market agreed on what was bad and how to enforce the regulation, it would be wholely unnecessary to actually regulate such bad action, because all participants are rational actors who will naturally punish that bad behavior themselves by preferring a competitor over the bad actor.

And yes, regulating poor behavior is absolutely picking winners/picking losers/picking specific companies to disadvantage/advantage, and not just because of issues with uneven enforcement. Determining which behaviors are disallowed and which behaviors will be policed by "natural market forces", especially when talking about modifying rules for a preexisting market, means picking winners/losers/who gets advantaged/disadvantaged. This is why encouraging/fostering competition is antithetical to making/maintaining a free market.