The facts as I understand them:
Once upon a time, Amazon negotiated a wholesale price for an e-book with the publisher, which is what Amazon would remit to the publisher for every copy of the e-book that they distribute. Then independently, they would set the retail price for that e-book, which was often $9.99, and was often less than the wholesale price. Therefore, Amazon was taking a loss on each copy of an e-book sold, but did so because they thought they were building a market.
Publishers were unhappy with customers getting used to a $9.99 price, and thought that would lead to future pressure to lower the wholesale price of e-books. However, there was little they could do about it, because Amazon owned the market. Enter Apple: with the launch of the iPad, Apple was seen as a new, large player in the e-book market, and negotiated the ‘Agency’ model, wherein the publisher sets the retail price, and splits the proceeds with the retailer 70/30. Amazon tried to resist, but ultimately folded and went along with the Agency model (under which they made more money, ironically.)
Enter the DOJ: they sued the publishers and Apple over the agency model, claiming it was anti-competitive. I’m not a lawyer, but this seems consistent with my understanding of the law in the United States: a manufacturer/publisher cannot set the retail price of an item, and they certainly can’t require that all retailers charge the same price. MSRP has always been a recommended price, and the manufacturer cannot take any action to prevent the retailer from charging less - or more. Even electronics manufacturers, who have long tried to protect full service retailers against discounters and now internet sellers, have to use a minimum advertised price restriction in their contracts, because they cannot set the retail price, or even a floor for the retail price.
So do I have this right? If so, what is the defense that Apple and the non-settling publishers are using?