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I'm guessing the reason to create an entire store was so they didn't have to pay Google a higher percentage?
back in the day it wasn’t clear that Google wanted a strong monopoly control over Android. Amazon was just another contender in the ecosystem.
Given how updating apps automatically in the background wasn't possible until recently, I do think Google wanted a strong monopoly over android. Yes, they allowed device manufacturers to pre install their own store, but they still had to include many of the Google apps to call it Android.