Fraid they do. This is a coercive monopoly. Described by Wilki as "........a coercive monopoly is a business concern that prohibits competitors from entering the field, with the natural result being that the firm is able to make pricing and production decisions independent of competitive forces. A coercive monopoly is not merely a sole supplier of a particular kind of good or service (a monopoly), but it is a monopoly where there is no opportunity to compete through means such as price competition, technological or product innovation, or marketing due to coercion; entry into the field is closed. As a coercive monopoly is securely shielded from possibility of competition, it is able to make pricing and production decisions with the assurance that no competition will arise. It is a case of a non-contestable market. A coercive monopoly has very few incentives to keep prices low and may deliberately price gouge consumers by curtailing production. Also, according to economist Murray Rothbard, "a coercive monopolist will tend to perform his service badly and inefficiently."
The "ebook library" is technical innovation and is limited by Sony to Waterstones and Sony's actions follow from this limitation.
I shall, of course, follow the workarounds suggested on this forum. In fact already purchasing from Baen (who do sell in Sony format anyway).
Many thanks for your opinions.