>There are limits to what contracts are allowed to legally do. And the idea that a contract can be broken, to the detriment of one side, due to the actions of a third party that neither has control over, and that the contract isn't primarily about, seems highly suspect.
I hate to be "defending" amazon here, but I doubt that they're doing this intentionally. In other words, they're not trying to retaliate against authors that had the audacity to have their books on torrent sites. Their behavior in this case resulted from a series of seemingly logical actions, at least when considered independently:
1. they have some sort of program which promises some sort of benefits (eg. higher royalties) in exchange for exclusivity
2. to enforce the above, they created an enforcement team to scour the internet looking for infractions
3. some worker was tasked with some vague task like "can you find this book on an alternate distribution platform?", and they were able to turn up some instances. Maybe it's not obvious to them that it's an unauthorized site (I don't pirate ebooks but some pirate streaming sites look plausibly "legit"), or they do but they don't give a fuck (the backoffice interface has a yes or no checkbox, and they're too lazy to draft an email to management informing of this edge case), so they flag that book as violating the agreement.