There's nothing wrong with Amazon's system, these people are committing fraud, it's illegal to submit a paid review without disclosing that the reviewer has been compensated.[0][1][2]
... The Guides, at their core, reflect the basic truth-in-advertising
principle that endorsements must be honest and not misleading. ...
In addition, the Guides say if there's a connection between an
endorser and the marketer that consumers would not expect and it would
affect how consumers evaluate the endorsement, that connection should
be disclosed...
OTHER THINGS FOR ENDORSERS TO KNOW
Besides disclosing my relationship with the company whose product I'm endorsing,
what are the essential things I need to know about endorsements?
The most important principle is that an endorsement has to represent
the accurate experience and opinion of the endorser:
You can't talk about your experience with a product if you haven't tried it.
If you were paid to try a product and you thought it was terrible,
you can't say it's terrific.
Amazon's terms also forbid paid reviews [3]
Who can create customer reviews?
Anyone who has purchased items from Amazon.com. All we ask is that you
follow a few simple rules (see "What's not allowed" below).
...
What's not allowed
...
Reviews written for any form of compensation other than a free copy of
the product. This includes reviews that are a part of a paid publicity
package
The comment I responded to said that the manufacturers may not have known. I simply pointed out the fact that, as stated in the complaint, some reviewers arranged to receive empty boxes so their reviews would appear to have come from a "verified" purchaser.
Amazon doesn't ship a lot of the items listed, many are merchant-fulfilled. Apparently some merchants were soliciting paid reviews and conspiring with those reviewers (by shipping empty boxes so there's a trackable package) to give those reviews more legitimacy. Again, without disclosure, that is illegal and against Amazon's terms.
The ability to have a 5-day, free download promotion is great for new kindle authors; it gives them a chance to receive legitimate reviews for their work. That doesn't translate to a problem with the system, rather a problem with some of the people using the system. That's what Amazon is trying to correct.
"Amazon mistakes mislead customers."
Victim blaming?
I don't even know how to respond to that statement because it makes no sense. Are you saying that it's Amazon's fault that people are mislead (by illegal reviews) because they provide a review mechanism? If so, that's absurd.