Amazon is putting together a platform to legitimize fanfiction! Yay! Sort of. Well, not really.
Amazon Worlds gets all the rights to your story once they publish it, including the right to republish it wherever, whenever and however they want, and the original content's creators (the people on whose fiction writers will be building their fanfiction) get the right to steal whatever they want from the fanfic. They get to do this stuff without ever offering any more royalties to the author, anywhere, ever.
It reminds me of Nintendo's recent move, to claim copyright over all the Nintendo Let's-Plays. The spirit of the move is this (using Star Wars for an example, just so I have a set of names to work with):
George Lucas makes Star Wars, and it's a huge success.
Another artist, let's call him Mike, puts in a huge amount of effort making a new work of art that is intimately tied to Star Wars, because he loves Star Wars so much. This work, let's call it Star Peace, would be impossible or nonsensical without Star Wars, so Mike thinks he should give Lucas a cut of the profits.
Lucas disagrees. Instead, he thinks he should give Mike a small cut of the profits from Star Peace -- which Lucas did nothing to create -- and then keep all the rest of the rights and profits from it.
If some new artist, who we'll call Clara, creates some huge project based closely off Star Peace, which I'll call Star Peace V: The Ambassador Strikes Back, she doesn't get to ask Mike how he thinks the deal should work -- she only gets to go through Lucas, who gets most of her profits, too (because he did create Star Wars) but Mike doesn't see a dime from Clara's work, even though it would be impossible or nonsensical without Star Peace.
If we look past all the reasons this makes no sense (Lucas no longer owns Star Wars; Mike, a friend of mine who does one day hope to write for the Star Wars extended universe, would never write something as dumb as "Star Peace," or agree to a contract that bad; Clara is a fictional character) it pretty much describes the way copyright works now.
That's what Nintendo is doing with the Let's-Plays, and that's what Amazon is doing with Fan Fiction. While it's true that right now copyright law gives the creators of derivative works no rights whatsoever (and so legally anything Amazon wants to offer them is more than they're entitled to), creators obviously deserve more rights than a tiny bit of money for playing along. If new work that would have been impossible without their work starts to explode in profitability, they deserve a fair share of all those new profits, just like the original rights holder deserved a fair share of the profits from the new artist's fanfic.