A law that stops tech companies from this abuse should also stop grocery stores from doing the same thing.
Amazon Basics undercuts competitors by having no cost to sell on the Amazon marketplace. Then once the competitor they're imitating is out of business, they can raise prices, and you wind up paying more.
I think it would be perfectly fine if the Basics brand existed as an independent company and paid the same fees as everyone else. But real competitors can't sell at a loss indefinitely just to win over the whole market.
Amazon branded products have an advantage through access to analytics, not cost of doing business. Amazon issues internal chargebacks to subsidiaries and business units for use of their platforms.
Still, even with those charges, Amazon can just choose to take losses knowing they aren't really losses. They can run that brand unprofitably and if the losses are coming from distribution fees being charged internally, well, the company still comes out ahead.
And the internal analytics is really a much worse abuse. I suspect that grocery stores make their internal brands the same way, and again, I'm strongly opposed to that being allowed.
How mild is it, really? Consumers might not feel it, but for all we know manufacturers (at least the smaller ones) are getting anti-competitively slaughtered.