The Atlantic has a decent summary of the situation and the implications, including this:
More liberal discounting practices will give Amazon the power to continue to gain market share and it's easy to imagine a scenario where it controls three-quarters of all book sales in the U.S. At the same time, higher co-op payments would make book publishers less profitable and less likely to invest in riskier book projects.
Story.
One point missing in the Atlantic piece is the fact that Amazon is also a publisher, and is therefore in the position of using its monopoly power to push its own books. And there has been more than a little speculation that the ultimate goal is to put the big five publishers out of business, which would make it easier to change the terms Amazon offers independent authors (which includes me under the KDP program).
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