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Public Domain and Other Non-Exclusive Content
Some types of content, such as public domain content, may be free to use by anyone, or may be licensed for use by more than one party. We will not accept content that is freely available on the web unless you are the copyright owner of that content. For example, if you received your book content from a source that allows you and others to re-distribute it, and the content is freely available on the web, we will not accept it for sale on the Kindle store. We do accept public domain content, however we may choose to not sell a public domain book if its content is undifferentiated or barely differentiated from one or more other books.
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The author's submission does not qualify, based on the information he says he provided to Amazon.
edit: note specifically that in his response to Amazon, he does not say that he is the copyright owner of the book. His response gives the impression that any publishing rights he has come from the free license that book is under.