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That is neither regulation (just standard contract law) and IMHO a formality, because Amazon could have just formulated it differently: hey we terminate your contract, next offer: same thing with ads (vs. Hey we change the contract for profit).

This is not a structural victory just a badly executed change.

The reason they don't do that is inertia. "Hey we terminate your contract, here's a new worse one" will result in far fewer customers than "lol you got ads now".

Same with a lot of providers simply unilaterally raising prices. Entirely illegal, but they are mostly getting away with it.

Amazon probably weren't paying the politicians enough money so the politicians aren't gonna let them screw the consumer!

Ah, capitalism, with your endless power imbalance.

We don’t want socialism with its burdensome regulations!

All a matter of balance. It can become like that in the wrong hands and often is. Here it is doing something useful. If only they could stop these companies spying as well.