It is important to note that this appears to apply to a limited selection of books.
Also the author has the ability to set the price for the Kindle version. It's dependent on the retail price but from what I've seen if the Kindle book is >$6 the author can do $2.99, $1.99, $0.99 or free. Then as the price gets lower (>$4) the options narrow to $1.99, $0.99 or free and so on.