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TwitterVia v7n, we find 8 Ways a Competitor Can Sabotage Your Site:
Although you may feel helpless against these attacks, victims of sabotage have the law on their side. Many of these 8 methods are explicitly illegal under US la
Site Sabotage: 8 Forms of Internet Terrorism
September 15th, 2007 
QuadsZilla 
Posted in SEO 
Most of those are dumb. The first 4 or 5 are pretty much the same thing and all revolve around a competitor doing link building for you in spammy places. So apparently the author thinks that sites can and do get penalized if they have bad incoming links. Apparently he never read the dozens of statements put out by Google etc, saying they don’t do that. In all my years doing this I’ve never seen that happen to anyone.
It is possible that you’ll be getting a benefit from a spammy link, then the algorithm changes, and that benefit is lost so it seems like a penalty, but that is just devaluing of the spam links, not a penalty.