Not that I've read TFA, but isn't this what free market economics is supposed to prevent? When a single entity can have that kind of power, isn't it a monopoly?
Holding a dominant position or a monopoly in a market is not illegal in itself, a monopoly is said to be coercive when the monopoly firm actively prohibits competitors from entering the field. In this case authors have many choices regarding publication: traditional publishers, self-publication; Publishers have choice over to whom they sell their books: Amazon, B&N, Borders and 1000's of independent book stores; E-book readers are increasingly entering this market segment: Kindle, Nook and many other that we saw demonstrated at CES a few weeks ago.
So no. This is what free market economics is supposed to encourage. In my opinion, Amazon trying to keep prices down is a great thing. The fact that some authors chose to publish their books with MacMillan who tried to reduce their readership by jacking up the price should give incentive to said authors to find a better publisher that actually wants to increase their readership.