Earlier this year Macmillan Publishers and Amazon had a public dispute over Macmillan’s requirement to charge between $12.99 to $14.99 for e-book versions of its bestsellers and some hardcover releases. Amazon retaliated by refusing to sell Macmillan’s books…but it only lasted about a week. Amazon gave in because, well, Macmillan has monopolistic power over its titles, and there’s not much they can do about it since they likely have a load of inventory they’d prefer to cycle through.
It’s important to realize there is another party in this dispute. Because market power is so short-lived (especially right now in the tablet market), Apple is being very strategic in its actions to maintain its market-leader position with the iPad. By persuading MacMillan to follow an agency model with Amazon, Apple has basically regulated Amazon’s Kindle by constraining any advantages the Kindle can gain in the sale of e-books.