The weblog, Comics Should Be Good, is running an occasional series examining rumors from the history of comic books, declaring some true and others as urban legends. It's good stuff and I hope they (or someone) will set up a Snopes-style webpage that specializes in such debunking. I hereby volunteer to participate as much as I can.
In this item, they're puzzling a bit over the story that for a long time, Marvel Comics were distributed by Independent News, which was an arm of DC Comics and which restricted how many comics Marvel (even before it was called Marvel) could publish. This is true, and it even went past limiting the number of titles. Independent also steered them away from subject matters that competed head-on with DC books — or at least, they tried to. Marvel/Atlas publisher Martin Goodman was a pretty feisty guy who spent most of the years of this arrangement pressuring Independent to accept more books from him and to let him publish certain kinds of comics that he thought commercial. He also had hundreds of pages of comic book material he'd paid for but never published, and he wanted to publish westerns and "weird story" comics, for instance, so he could use up some of that inventory.
He was occasionally successful in convincing Independent, which is why, though the initial agreement in 1957 limited him to eight releases per month, he soon began to exceed that limit. In 1961, when he was permitted to publish Fantastic Four #1, he was over the eight-per-month restriction. They also yielded and let him publish some comics in genres that competed more or less with the DC product. When Marvel began to eclipse them in sales, some there regretted that concession.
One small thing that the weblog gets wrong is when they write, "…finally, in 1968, Marvel was a big enough sales success (and DC was in a major sales slump) that they were able to negotiate their way out of the deal entirely, allowing themselves to sign with Curtis Distribution. You may have noticed that 1968 saw the end of Tales of Suspense and Tales of Astonish. That was because finally, Marvel was free to make title decisions fully on their own!" That's almost right except that Marvel's 1968 expansion actually occurred while they were still with Independent.
What happened was that in late '67, Goodman finally won a major point in his ongoing battle with Independent. He wanted to publish more comics than they'd allow him to put out, and he wanted to do things like ghost comics and love comics, which they were then denying him. Finally, he said to them, in effect, "Look…my contract with you is expiring in March of 1969. At that point, you're either going to let me publish what I want or I'm going to find a distributor who will. You and I are both trying to sell our companies so we have a mutual interest in inflating our grosses. Let me expand now and it will give both companies a big boost." Jack Liebowitz, who ran DC and Independent, had previously been worried about allowing Goodman to flood the newsstands with product, fearing it would harm the market and harm DC. But he was then angling to sell DC and Independent to a company called Kinney National Services, and he saw the wisdom of even a temporary jolt to the distributor's fortunes. He also knew that Goodman wasn't bluffing; that he could find a distributor who would let him publish without restriction. Liebowitz wanted to keep Marvel under the Independent umbrella if that was at all possible, so they negotiated a new arrangement. It didn't lift all restrictions right away but it did allow him considerable expansion room, which he used to begin adding more titles.
The decision probably helped both companies. Grosses were up when Liebowitz concluded the deal to sell to Kinney. Goodman soon sold Marvel to an outfit called Perfect Film and Chemical Corporation. The only snag for DC was that since Perfect Film owned a magazine distributor, Marvel moved there when their old distribution contract expired.
Apart from that, the story as reported is true. Marvel was distributed for many years by DC. One of the reasons some comic book writers and artists felt so imprisoned in their jobs, and accepted that they had to tolerate some onerous terms of employment, was that the "competitors" weren't truly competing. DC and Marvel had a number of co-operative business dealings (the Comics Code was another) and there was often a feeling, true or not, that publishers were conspiring to limit pay scales and would sometimes agree not to hire certain individuals away from another company. As Jack Kirby once said, "Any time two publishers have lunch, somewhere a freelancer goes hungry."