The point is that the word "amazon" (which is what is being bought as a gTLD) was not first used in South America, so they have no claim to it beyond "we use it too". Which isn't a good claim, otherwise they should've/would've been able to prevent Jeff Bezos from calling the company Amazon in the first place.
No, they used it first and Bezos named his company after the river. He could have chosen another name instead of using one that was already taken. He's the one that caused a name collision so he's the one that should suffer from it.
