I have been waiting for the dust to settle before commenting on the recently erupted battle between amazon.com and Macmillan publishing.  Here is my short summary of the situation.

The conflict has been brewing for the past year or so, and has escalated to a peak when Macmillan wanted to price their e-books at $14.95 a piece (a price that would decline over time for less popular titles), and amazon.com insisted on keeping an e-book price cap at $9.99.  This coincided with the release of Apple iPads, which will be in direct competition with the amazon's Kindle, and, coincidentally, will feature Macmillan books.

Both parties took a high moral stand, Macmillan saying that it is a publisher's right to set book prices — which is absolutely correct, and amazon claiming that their mission is to protect consumers — which we all welcome, don't we?   The underlying problem is of course that both parties are driven by profit, not by high principles of the matter.  More on the surface, though, while Macmillan's stand has merit — they are the publisher, and it is up to them to set the prices of their books — amazon's claims about protecting consumers don't really measure up.  They are the sellers, and in the free market they should not be fixing the prices for their merchandise. 

To make matters worse, amazon tried to muscle the situation by pulling all Macmillan books from their system.  That alone was a low blow that triggered a huge response.  In the past few days many posts have circled the Internet with arguments for 'camp Macmillan' or, in a few cases, for 'camp amazon'.  Some angry posters promised to burn their Kindles and cut all ties with amazon.  More practical ones said they would still enjoy the convenience of on-line amazon ordering, but resent amazon's actions. 

Yesterday, amazon has finally announced its capitulation, reaching a shaky truce and hopefully putting an end to the active hostilities.  Macmillan books will now be available through amazon once again.

As an author and a reader, I hope peace can be restored and we can continue enjoying books from all publishers, all sellers, and in all formats.   While paying $14.99 for an e-book does seem a bit steep (as does $9.99 for that matter), I believe free market will prevail in the end and each book will be sold for as much as the consumers are willing to pay.

For more detailed accounts on this situation, I highly recommend the following sources:

Agent Nathan Bransford analyzes the situation at his blog.
Author Tobias Buckell has a great summary from the author's point of view 
Agent Kristin Nelson at her blog offers a recap of the story as it unraveled during the past weekend

And, you can do a search on 'amazon vs Macmillan' for a good collection of views on the topic