They sell illegal goods. Yes, I'd say they're doing something illegal. Now the illegal goods happen to be supplied by other people without Amazon's knowledge, but Amazon is still the one selling them, and they have a duty to know what they're selling. And once they know that some of their suppliers are selling them illegal goods, they have a responsibility to do everything they can to stop that and prevent it from ever happening again. Instead, they choose to describe it as not a big problem.

IIRC they use the defense of just offering a marketplace where other vendors sell stuff. That did not work for places like Silk Road, and given that Amazon handles the delivery I doubt it holds up - at least not in all legislations Amazon is active in.