Is it sleazy as all getout? Yup, absolutely: but it's not illegal. Companies pull this kind of bait and switch all the time when they think they can get away with it. Remember when Microsoft bought the original Internet Explorer codebase in return for the company in question receiving a cut of the profits and then gave it away for free? How they must have laughed about that one back at MS HQ...
In reality, the publishers handed Amazon a near monopoly on ebook sales by their own short-sightedness and now Amazon is turning the thumbscrews to see how much they're actually prepared to cough up. The games with VAT in the contract are just part and parcel of that.
Until they lost the lawsuit...
http://www.windowsitpro.com/article/news2/microsoft-and-spyg...