We get a ton of ARCs at work, and I'm on the reviewer rotation, so I've written a number of reviews.
I can tell you for a fact that once those ARCs hit our desk, they get the review we think they deserve. THere's no obligation whatsoever to write a positive one. (And frankly, a lot of the books we get are not that great. I try to be more ... circumspect ... but I've had co-workers write some brutal ones. Well-deserved, too.)
Were a book by a person I know to cross my desk, I would decline and pass it on to another reviewer. Too much conflict of interest. Does this apply to Amazon reviews? I don't know, but maybe it should.