The Galleycat bulletin reports that author James Crawford, who published his book using Amazon’s Kindle Direct Publishing, was delighted to discover one day that there had been a huge increase in downloads—more than 5000. He was not so delighted when he saw that Amazon had decreased the price of his book from $5.99 to zero.
The Amazon policy is to match the lowest price of any books they carry, and they thought that Crawford’s book was being offered free at the Barnes & Noble site. In fact, that site was offering only a few sample chapters free, not the whole book.
Crawford asked Amazon to pay him the royalties for those 5,104 books. Their reply: “We’re sorry, we’re unable to pay royalties for your sales when your title was listed at $0 on our website. As per our KDP Terms and Conditions, we retain discretion over the retail price of a Kindle book.”
Of course Crawford hasn’t really lost the royalties from 5000 books because he never would have sold that many at the full price. However, as a good faith gesture Amazon could have offered to pay the royalty on however many books were downloaded at the full price during a comparable period. It would probably have been a small amount and worth it for PR value.
On the plus side, Crawford now has 5100 people familiar with his work and who may be more likely to buy his next book at full price.
(Self-publishing is one of the many topics covered in Your Writing Coach, published by Nicholas Brealey and available from Amazon and other book sellers. It's a friendly guide to getting from the idea through to publication.)