I experience first-hand the results of nepotism and it is an awful idea. Especially when the relative hired is a direct-report, and you have to "compete" against them as they're in your group.
Double-standard doesn't even begin to describe how blatant it is here. In fact, the careers of others were literally sacrificed to give the nephew a job.
And there's nothing you can do about it, unless the company has a stated policy of non-nepotism and then openly violates it.