You bring up an interesting question. I'm not sure of the answer, but here are a few of my thoughts.
I don't know if you're uploading directly to Kobo or through Smashwords, but I find this bit of info on Smashwords comforting, "Smashwords retailers are not allowed to discount your books, unless they're price matching a lower-priced competitor (Best practice: keep your prices consistent). Kobo may still discount titles for sales transacted outside the US and Canada for currencies other than US or Canadian dollars." This text is included in the Smashwords Sales and Payment Report screen. So this indicates that unless you lower your price at a vendor or upload to a vendor that lowers your price, the price-matching problem with Amazon shouldn't occur.
I think Amazon will only get upset if you set your price at Amazon at or above $2.99 to get the seventy-percent royalty and then set the price elsewhere to $.99. They would then price match to $.99, but you'd keep getting the seventy percent royalty. This became a pretty big problem on Amazon, and they were not happy. This is why some authors were booted. If you set your royalty at thirty-five percent no matter your price, I don't think Amazon will care how low the price goes. I currently have a perma-free on Amazon going on 2 years and have had no issues, but the Amazon default price has always been $.99 with 35% royalty possible (no royalties on free naturally).