Apple iBooks lawsuit by the US government is relevant here. Book publishers and Apple made a deal to change pricing to an agency model, where the publishers dictate the price. The US government sued them on the basis of anti-competitive price collusion. This slapped Apple and let Amazon go back to it's race-to-the-bottom pricing. In fact the US government is right that Amazon's methods are the essence of a free market. They are just bad for every other player and lead to Amazon expanding it's market share and thus making Amazon more of a monopoly.

Very interesting twist.

It gets bad for consumers if:

1. Once Amazon has all the market it raises prices.

2. The price pressure on manufacturers, publishers, and other producers of goods causes those businesses to fail and stop making their products, or to produce lower-quality products.

Certainly in the EU. I am not sure about the Walmart situation though, since something similar is tolerated here (Germany) with the supermarket oligopoly.

Given their size, you can be certain that Amazon is being watched. It's possible they are already running afoul of the rules:

http://ec.europa.eu/competition/consumers/abuse_en.html

Probably "depriving smaller competitors of customers by selling at artificially low prices they can't compete with", since they offer insanely cheap shipping.