Sellers are definitely allowed to operate multiple Seller Accounts, however one of the main conditions is having a prior permission from the Seller Performance.

In addition, the services and products sold in each store need to be different so it shouldn’t happen that there will be offers from the same trader available from their various accounts on the same listing.

Unfortunately, I think that it is very unlikely that Amazon will take any action on your reports of the other competing seller violating the policy.