This to me is still quite shocking, especially since those are completely separate departments and such behavior would so clearly scream anti-trust
The word you're looking for is business. This is literally how big business to business is done. It also doesn't automatically mean anti-trust.
It would scream anti-trust though, and would surely attract the attention of regulators (which are already circling in the skies)
Because Amazon is likely already giving big companies discounts. There is a huge amount of competition between the big 3 cloud providers who work whatever deals they can to get big customers.
B2B deals are not like consumer ones. Often times companies will "trade" their own business' service in place of cash.
This is true, but it misses a big motivation behind it. It costs more to have enough capacity to support on-demand use since it has to sit idle, waiting for a customer. Part of the discount you get is you give AGA certainty in demand. They don't need to hold as many machines in the on-demand pool, and it makes long-term planning easier. You'll also find that those on-demand prices don't actually scale. At some point, you'll have to talk to a rep and commit to more hardware and a discount because you're just too big.