I pay for Fastmail and I don't know anybody there. Same with Microsoft 365. I wish I was friends with the Roshal brothers!
What you mention, is a case of private sector corruption and I've seen it first hand, but I wouldn't say it's normal or even discuss it as regular practice.
In my B2B days I definitely saw deals made among friends like that, but I mostly saw salespeople inviting potential customers to expensive dinners that did not end in a sale. Failed cronyism then?
Every service has a moat; sometimes a technical one (I.e. block competitors as spammers), sometimes the moat is regulations (Are you SOC2 compliant?); other times it's just a business contract between people who belong to the same club.
Richard Stallman must have looked almost as delusional when he started a free compiler and an OS in the 80s.