ACES UP, you cannot have an absolute fair market if you have a man in the middle (the MM) that has a number of possibilities others don't have.
Level 3 has been mentioned before, well MM can simply pick from L3 lines BEFORE they ever make Best Bid or Best Ask. Hence, the rest of the market NEVER sees them. He can because he can FORK.
Say, he needs to fill 10K shares at 21$, then he moves his forking tool (that is automatic these days) so as to serve/fill the most possible shares while remaining the lowest possible under the limit price (if applicable).
So if the Ask is at 20.80, he forks from 20.80$ to 21$ (only he sees orders that cross the market and hence are not shown, in this example all asks above 20.80$) and takes EVERYTHING at once. You have NEVER seen the asks at 20.80$+ BUT time and sales will show you the transaction lines WITHOUT THEM impacting the PPS. The PPS will (for instance) show 20.90$ while there may well have been lines at 20.99$ in the lot.
So, now you understand what the power is to be able to move the ticker DIRECTLY. Something nobody else can do. All Bids/Asks adapt immediately, the more that it is forbidden to cross the market. (=if the best bid is 20$, then you cannot place an ask at more then 20$. It remains in the market book until it is its turn.)
So, fair...yes because it is the same for all, ...No, because it is arbitrary in some way.
On the positive side, if the MM cannot do that our stock would probably still quote at 3$ (and for that matter all other stocks on markets driven by market makers). As the word says it: THEY MAKE MARKET. That means they must assure a certain liquidity under (LOL) Fair market making regulation :)
All In My Opinion. I am not advising anything, nor accusing anyone.
