Earlier quoted context omitted.
I read a lot of companies buy advertising specifically for their own name, because if they don't, a competitor will, and will appear first when someone googles the company name.
You are right - That’s another practice is morally dubious (And imo should be outlawed!) (Not on the purchasing companies side, but on google selling keywords for someone’s brandname which effectively forces companies into bidding for their own name)
Where this gets tricky is when a business has a name along the lines of [city name] [generic product category].
If this was outlawed, a competitor to a business named Foo-town Yard Care would be effectively blocked from advertising on Google.