> for something like the local pizza place, customer behaviour doesn't match that of a market participant.

I'm not sure why you think that. "Market participant" doesn't mean "always takes the lowest priced deal". People are willing to pay higher prices for food from local restaurants, as opposed to chains, fast food, etc., because they feel that the extra value they are getting (better quality, knowing the people who make the food, the atmosphere of the restaurant, etc.) is worth it. That's a free market.

What is not a free market is large corporations who get all kinds of government favors to prop them up coming in and taking advantage of arbitrage opportunities that the locals don't have the time or the energy to protect against--still more if such opportunities involve "marketing" the locals' products in ways the locals didn't agree to, and would not agree to if they were given the opportunity to make a choice. I completely agree with you that such things should be shut down.