Did shareholders not want them launching on a Falcon 9 because it was helping a competitor, or did they actively want them to use the F9 because it's the most affordable option but Bezos (or other higher ups) didn't want to support a competitor?
The latter. SpaceX isn't an Amazon competitor if Amazon doesn't have their constellation in the first place, and the loss of a handful of launch contracts from Amazon isn't going to slow SpaceX down (while on the other hand, it would slow Amazon down considerably.)
Bezos didn't want to launch with SpaceX because SpaceX is a Blue Origin competitor. Shareholders sued over this, saying that Amazon was putting Bezos' personal interests before Amazon's own.
