Ask HN: Is this behaviour anti-competitive?

I came across a software company that has a clear monopoly in a niche market. They give away their software to businesses in exchange for controlling the price at which clients pay for the service.

It's not like the company in question is selling a bad product, I believe they have a good offering. However it is the business practice that leaves me wondering.

My gut feeling is that this practice is unethical and I immediately thought about the MS antitrust lawsuit. I'm not trying to make false equivalences or legal judgements, but rather to understand this type of business practice.

Is this type of practice well studied? Does it have a name? How can a competitor break into the market without offering their software for free?