I suspect (here as with the earlier story about imposter goods on Amazon) that the explanation for Amazon's behavior is that it doesn't have the resources to moderate the system its created. Disallowing price adjustments altogether wouldn't work for many categories- sometimes the price of milk just does go up, and retailers can't always just eat the difference. Disallowing only manipulative price adjustments would require either a sophisticated AI (which would be liable to fail in perverse-looking ways) or an expensive team of human analysts (which would at least only fail in plausible-looking ways.) But until these sorts of issues really start effecting Amazon's bottom line, its not going to touch them.

It's hard to know how it affects them because Amazon is held to a special standard where making money isn't really a thing.

I know anecdotally that non-techie people whom I associate with increasingly are wary about Amazon after getting scammed by fake phone accessories or gouged by Christmas toy prices.

When you consider that Amazon is moving into new categories where trust is critical, like food, this is going to hurt them. Every grocer peddles trust, "we're good neighbors", etc.

The issue is that there is no such thing as "the lowest price", it depends on supply and demand, and either can fluctuate drastically in short periods of time (i.e. surge pricing for uber). The manipulations the article mentions, that exist in all markets, are very rare.

There was a low price once, the cost price. But then in todays world, VCs eat the difference.