In the world of market makers any edge on a stock is worth thousands, if not millions, of pounds they will do anything they can to get an advantage.
If you are obligated to show a bid and offer price, but you know what the future flow will be, you can influence the spread and protect your balance sheet.
You are basically buying guarantees.
Buying order flow helps large financial firms who can afford to trade off the information, the cost to an institution to place a trade is fractional to the commission they charge, you can just look at HL’s or AJ Bell’s margins in their financial reports to see this. For a company to sacrifice commissions it has to be seriously big business.
In any market being able to buy guarantees or protection and effectively price out competition is bad. What if you had an app where you could book a taxi, and they found the best company for you? Rather than charge you for this service they accepted “bids” to win your fare. The competitor with the most money could outbid everyone until they are forced out the market, or they might be the most expensive firm and give you the worst value for money.
One thing the FCA has been very good at, is focusing on levelling the playing field. RDR, PFOF, even what they tried with gold plating MiFiD II, they want to make sure everyone is transacting with the customers interest at heart.