Therefore, Amazon, Walmart, etc, should be prohibited from competing with their own customers. Vertical partitioning.
Further, the advertizing business must be separate, for all of FAANG et al. Horizontal partitioning.
Busting these trusts up will unlock shareholder value, allow competition, boost innovation. Same as before (oil, railroads, telephone, etc).
I'm ok with Amazon remaining in logistics, shipping. Once Amazon Prime is no longer run at a loss, it probably won't be anti-competitive.
Strip malls no. Strip malls with an anchor store could have some profit going to the anchor stores.
Amazon has solved the shipping end and that's where much of their value is.
I am fairly sure that if Amazon had started the marketplace by promoting it just as an online department store, with all the "selling to retail" elements in the GP, it would have been much less successful than it was given their actual promotion of it as a marketplace.
If we were talking about Amazon as just a retailer, yes, everything you've said would be true.
If we were talking about independent 3rd parties being retailers on their own web sites, then yes, everything you've said would be true.
But we're actually talking about independent 3rd parties selling through Amazon's marketplace. Amazon hasn't really promoted its store as if it was a department store, but rather as a mall owner (and perhaps operator of the keystone store in that mall). In that context, the usual arrangement is that the 3rd party sellers just rent space from the mall owner, but the mall owner gets no cut of their sales (nor any information about their sales).
Most 3rd parties selling on Amazon do not consider themselves as "selling retail" the way they would if they put their products in Nordstrom or Target or Neiman Marcus or Dillards. They (imagine) are using Amazon as a way to sell direct to customers, but instead, Amazon's arrangement is indeed more like the traditional retail model that you've described.