> Regulations create monopolies. Even when regulations are aimed at curbing the control of giants, smaller players usually can't afford them and lose market share. This is actually taught as a competitive advantage strategy in business school. Corporations lobby the government to implement laws that seem to hurt them but in actuality create an uneven playing field where marketshare becomes available due to the higher implementation cost.
The only way to guarantee a monopoly is to have a total lack of regulation. It's known that every "free" market will tend towards monopoly due the 1% law. Regulations are the only way to actually guarantee free markets because perfect free markets only exists in abstract, not in reality. Sometimes, a free market is the wrong solution and you need a regulated monopoly instead and with identity that's the best solution. Why? Because identity is unique to the individual. A individual must (in theory) only have one identity and with very extreme and usually well documented exceptions, such identity doesn't change. The state is the one that must provide a good way for identity and if smaller countries doesn't have the resources, then big countries should provide for all. Also, it removes incompatibility inter-countries while keeping private interests out.
The state should have the sole monopoly on attesting to anyone identity. Because they are the only ones that are not affected by market conditions. This is how countries that have advanced in this topic actually work. If individual states can't reach a common solution, then the collective must do so. The collective failed here because it recommended a private solution rather than mandated a european one. Private sector must not dictate what or how identity is attested, because the private sector has it's profit pursuing agenda, state must evaluate solutions but it's up to the states to run them and implement them.
Market solutions are good for several things, this isn't one of them.