Essentially, if the "front-runners" (not really a correct term, since nothing illegal is going on) weren't doing this, then the index funds would have to pay a huge premium to buy large amounts of stock on extremely short notice. The "front-runners" are actually reducing the index fund's overhead costs (and, yes, being compensated by the market for doing it). They certainly aren't cheating the index fund investors out of anything, because their investments will track the market, regardless.
http://www.bloombergview.com/articles/2015-07-07/can-you-rea...
Essentially, if the "front-runners" (not really a correct term, since nothing illegal is going on) weren't doing this, then the index funds would have to pay a huge premium to buy large amounts of stock on extremely short notice. The "front-runners" are actually reducing the index fund's overhead costs (and, yes, being compensated by the market for doing it). They certainly aren't cheating the index fund investors out of anything, because their investments will track the market, regardless.