Of course Amazon is spying on AWS customers
I had an interesting discussion with some of the Infosec bods who approved usage of AWS in the corporate I'm currently in. The AWS T's & C's states something along the lines of they withhold the right to monitor traffic in their AWS platform, but will maintain privacy of clients and not monitor client-specific traffic.
With some clever analysis though, it wouldn't take too much effort to reverse-engineer client-specific metrics from the cloud metrics collected, based on what parts of a VPS network are popular and the sort of transactions taking place.
One of the Infosec bods pointed out the current situation with M&S. They'ved moved onto AWS, and their migration to AWS seems to almost go hand-in-hand with a decline in M&S's online sales. Almost as if their online business suddenly has strong competition from certain on-line marketplaces who may or may not be able to establish from some clever data analysis what's proving popular for M&S and counter with their own offers.
This could all be down-vote worthy paranoia. But it's certainly food for thought.