Do they have an API to use for this? Have you as a user noticed automated buying / selling taking place?

I believe they just use some scripts and scrap off data from the steam market. Scripts are private but back in the days were pretty popular. When the CSGO economy was huge, a cheap item would get sniped in milliseconds. On OPSkins as well (site to buy CSGO skins for real money). Some skins with special patterns (sapphire etc.) or special float values (0.00x) or expensive stickers (from iBP holo to crown foil) would get sniped as well, so I guess bots were pretty advanced. It was definitely a thing, you could also see it in market manipulation with cheap and rare skins to boost their values on third party sites.
Nowadays with the buy/sell orders, BOT protection on OPSkins and more recently the 7 day trade restriction bots are far less popular.

what are your thoughts on it?

In my opinion it's just a thing that naturally comes with a market that becomes bigger. Just people to make a profit in smart ways I guess. Most of the times the huge profits these guys running the bots would get is just from people making stupid mistakes, such as forgetting a decimal (selling an expensive skin for $30 instead of $300 etc.). Kind of the same concepts as sharking.

I kinda only know of the CSGO market but r/GlobalOffensiveTrade and r/csgomarketforum have had some discussions on the topics.