* to produce copies or reproductions of the work and to sell those copies
* to create derivative works (works that adapt the original work)
If the app allows you to download and save then it is making a copy.
If the app doesn't display the ads then it is making a derivative work.
Fair use may allow a person who owns a copy to make copies for backup. But that doesn't extend to people who don't own a copy.
Fair use may also allow an individual to block ads.(low chance on this) Microsoft blocking ads for you by default so they can sell more phones is not fair use.
They broke a monopoly, which is not only legal, but generally considered beneficial.
They did not break a monopoly. Amazon was already loosing share to B&N prior to the Agency model.
They used an existing model, which is legal.
Just because something is existing doesn't make it legal. ITunes is probably also illegal. That is why Apple is fighting this.
So what did they do wrong?
They raised prices. Anti Trust laws are about keeping prices low.