Did the free market fail in this case?

Its false to say a free market will naturally bring about the evolution of sweatshops, though I suppose one could argue that with zero regulation it might. Inadequate governmental regulation was to blame in this story, not just on the home front (safe working conditions), but in the trade restrictions that should have been in place to make overseas sweatshops unprofitable. Its not an all-or-nothing equation (free market vs. regulation); they must co-exist.