This kind of government regulation is very constructive, when conducted properly.
An important role of government is to provide us a free (as in freedom), safe, orderly environment in which to conduct our business transactions.
Competition has proven to be one of the best motivators for advancing humanity, both on individual and national levels.
A government should prevent domestic monopolies by blocking select corporate takeovers or by breaking companies up that achieve monopoly status. They should also protect domestic firms from foreign monopolies, foreign government owned / heavily subsidized companies using trade barriers like tariffs.
In order to avoid conflicts of interest, we should avoid having the regulating body (government) controlling companies or major stakes in companies. In effect, it would produce companies regulating themselves, which typically leads to no real regulation.
This is a general strategy and there are exceptions, it is why we should tread lightly with free-trade-pacts with countries that do not think the same way.