[fpgeek]

First, no one has proven that Amazon was ever playing a true loss-leader strategy in ebooks, as opposed to losing money on bestsellers and making it up on the backlist.

Second, the existing DoJ settlement specifically allows publishers to police this. One of the terms the settling publishers are allowed to insist on is "no losing money on my catalog overall". That's more than enough to prevent truly anti-competitive discounting.

Third, yes, startups will have a hard time. But they had a hard time with the agency model too - which restricted their maneuvering room in significant ways. For instance, with a publisher-specified price you weren't just forbidden from charging "too little", you couldn't charge "too much" either. That means models where startups charged a premium for ebooks in order to support other services their target readers wanted were no longer possible.