At the same time, it also turns reality on its head to portray Amazon as being pro-consumer in this case (where's the good old Amazon that helped force Apple out of music DRM by launching Amazon MP3?). In this struggle, it seems that both sides are trying to price-fix, but to different prices, and without much concern for either the consumers or the authors that are so directly affected by their falling-out.
The question of which is ultimately better for the consumer is non-trivial to my mind. Not to mention that, because publishers tie author royalties to the physical cost of production, the authors stand to lose a lot in this struggle.
If something won't be profitable to make, it won't be made. The best price for the consumer is the lowest price at which the item desired by the consumer can still be produced.
If something can't be made it's price is infinity. If it's custom but possible to create it's price is high. If it's mass produced it's price drops. If it's pubic domain it's free.
PS: Saying people will not make it at some price just means it's actual price is higher.
My point with the parenthetical note is that Amazon is not acting in a consistent manner. With music, they trumpeted the virtues of going DRM-free and allowing for dynamic pricing, while with books, they're sticking to DRM and not allowing dynamic pricing.
As for price-fixing, if there were multiple vendors for e-books on Kindle readers, then yes, I would agree that Amazon is not at all price-fixing. Since they are, however, the sole provider of e-books for the Kindle (more or less-- you can convert other formats to Mobipocket with mixed results, and the Kindle 2 and DX versions have limited PDF support), their insistence on uniform e-book prices can reasonably be seen as a kind of price fixing. This is part of why I opined over at Chad Orzel's blog (http://scienceblogs.com/principles/2010/01/the_amazon_kerfuf...) that an upshot of this falling-out should be that in order to keep their platform viable, Amazon should drop DRM and support ePub or some other standard format. If they followed their own example of Amazon MP3, then they really would be consumer advocates by taking issue with Macmillan.
As Cory Doctrow points out, Amazon has not revealed exactly what they mean by DRM-free. Moreover, the difference is not labelled on the Kindle store for consumers to see. Thus, while it is absolutely true that the publishers deserve blame in this case, my point is that Amazon is not helping to kill DRM and make their platform open to non-Amazon sellers. Of course, the big difference between this and the Amazon MP3 store cases is that with the Kindle, Amazon makes the device.
"DRM-free" implies to me that I can use the download on any hardware that can play the format. IIRC, Amazon's "DRM-free" titles still carry a license that prohibits their use on any platform other than Kindle.
Other good perspectives:
* http://scienceblogs.com/principles/2010/01/the_amazon_kerfuf...
* http://whatever.scalzi.com/2010/01/30/a-quick-note-on-ebook-...
* http://malkingrey.livejournal.com/577241.html