The issue is that there's no such thing as a free market. Markets must have rules, otherwise the market will create conditions that destroy its own "freedom."

For example, slavery is bad for the free market, but without restraint any economic actor has huge incentive to use slavery, or do other immoral things that can provide huge competitive advantages. That's exactly what we see in all kinds of black markets.

Malicious behavior is potentially economically beneficial, so we must have "law" to restrain it. But all "law" distorts the market in various ways. The question is all about which laws we think are acceptable and which ones aren't. There is no easy way to define this, even if everyone agreed on common principles (which we don't, in reality), there's just too many grey areas.