As far as cartels go, there is indeed no difference between a merger and a cartel so long as the cartel continues to exist. Empirically, though, we know that cartels tend to be short lived; market forces have a tendency of breaking them up. It ultimately all goes back to competition: those members of the cartel who are more efficient get frustrated with essentially propping up the less-efficient and break from the cartel. Even if the balance is even enough, if real price gouging is going on, the same exact thing happens as in a monopoly: new competition enters the market. I realize this is a fundamental point on which we disagree on, though.
I believe that a free market can correct such conditions, although I don't believe that it necessarily will do so. And again, I don't believe that it can ever correct them fast enough to prevent an unacceptable level of damage and dislocation. In a small market with relatively small players, customers rule, because the corrective feedback is fast and effective, sometimes shockingly so. But this behaviour does not scale. As the market gets bigger, the number of individuals that represent a company's customer base increases much faster than the number of individuals comprising that company. Paradoxically, this gives the customers less power; their geographic dispersion, and the almost impossible task of co-ordinating any actions they might take in response to some policy or behaviour, pretty much guarantee that their disgruntlement will have little or no effect on the company. The company, on the other hand, can pretty effectively enforce common goals, directions, and behaviours among its employees, and they have efficient and well co-ordinated internal communications and established hierarchies. That makes them much more monolithic, and it makes their ability to promote their own self interest much greater, often at the expense of their customers' satisfaction and well-being. Maybe those customers can find a friendlier competitor, but often they can't. If those customers have to wait years, or even decades, for a viable alternative, all the while putting up with poor products and services from an unresponsive company, then to me that is simply unacceptable. In rare instances the advent of the Internet has put some power back into the hands of consumers, but not nearly enough.
I share your wariness of regulation, simply because governments have a tendency to become aligned with, corrupted by, and sometimes co-opted by, business interests. But I think the answer is better government, (which requires better electoral systems as a necessary but not sufficient condition), not less regulation.
I recognize many of your references and your recommended reading from my days, (thirty years and more ago), as a Libertarian, an Objectivist, and a follower of Ayn Rand. I think any further discussion we might manage to have will probably be cicular, because we're starting from two different and in may ways diametrically opposed premises. I no longer believe that there is any absolute, objective truth - if I were a minor character in Atlas Shrugged, Rand might have dubbed me "Non-absolute". ;-)