Yes, it is possible to filter the records available in the lookup when adding a new item to a detail in Freedom UI.
To do this, you can set up a static filter on the list component or mini page that opens when you add a new record. For your use case — displaying only accounts with the “Competitor” type — you can apply a filter on the Type field of the Account object.
You can find more information about setting up static filters in Freedom UI in this article:
