Big companies like allyou.net, carbonmade.com, format.com all have a site-wide follow link of each of their customer's website and really game the search.
Are they not penalized because the subject matter of the business and the customer are similar (eg. artists/photographers?)
Google's web-master guidelines state "creating links that weren't editorially placed or vouched for by the site's owner on a page, otherwise known as unnatural links, can be considered a violation of our guidelines. " and further specifies "Widely distributed links in the footers or templates of various sites".
Why aren't these sites being penalized? Is this SEO technique legit?