To take an easy example that has actually had lawsuits I can link to, you must be unfamiliar with the lawsuits against Amazon for misusing sellers' data in order to undercut them with their own products... https://www.reuters.com/sustainability/13-bln-uk-lawsuit-acc...
There's zero reason to "trust" Amazon about anything. (And yes, I know the retail and AWS sides of the company are different, but it's still the same company. The same rot is always there, just shuffled around.)
this is not related to AWS, but merely to amazon's retail business and their sellers know and sign up for the deal when they sell via amazon.
every single retail company does this, they allow suppliers to sell the product using retails's infrastructure, and then retailer turns around and create private label products using sales data (Costco's Kirkland Signature, Walmart's Great Value, are just some examples)
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The retail side is completely different from AWS.