Everyone on the internet is free to go and use any other service.

Yes but that’s not the claim you made. You wrote “It’s their private website, they do on it whatever they want. Right, lemmy?” and this blanket statement is wrong. They can’t to “whatever they want” because they are bound by laws. If Google/Alphabet instituted rules on YouTube that competing video services like Nebula cannot named at all, market watchdogs would be at their heels immediately and they’d win in court if it came to it.

Can they put ads on pause screens? Yes. Can they do “whatever they want”? No.