Yes, of course they do. There was a post on here about a year ago from someone in the "Amazon profitability team" that involved digging through customers AWS instances to see what they could learn or duplicate for Amazon.
I _need_ to read more about this (about to begin a migration to AWS, not retail though).
https://www.datacenterdynamics.com/news/ovh-ceo-unlike-amazo...
https://sellercentral.amazon.com/forums/t/amazon-literally-s...
https://fortune.com/2016/04/20/amazon-copies-merchants/
https://www.theverge.com/tldr/2019/9/19/20874818/amazon-allb...
I can't find the most recent set of posts about peering into customer's AWS instances to research what they could copy but consider that govcloud exists.
As for govcloud, it exists because regulatory requirements for running things for gov are more strict than your average user/business requires and such cloud offerings require certain levels of hardening and software security and assurances. I happen to work in the space so I understand the need for an alternative offering for government requirements. There's really nothing nefarious going on there and its more about govs not wanting to run alongside regular users. I see nothing concrete I could take to my superiors.
I’m also unsure how the explicit trust from the government (“consider that govcloud exists”) is somehow evidence for their untrustworthiness?