It's anti-competative because it forces developers to use a service they may otherwise not have wanted to use, and also encourages vendor lock-in - users are less likely to switch to a different platform if all of their crap is "signed in with Apple", making it much harder to migrate to android, for example.
Forcing devs to include it, then advertising it as the "better option", will naturally encourage uptake. Yes, it has its benefits on privacy, but it's more about locking people to the ecosystem in reality.