I had my site (homepage) at no.3 and another backup site at 5 in the rankings for a very lucrative kw. I planned to flip one of those sites so that is why I built two. A competitor was at no.1 and another at 2. This has been the case for a very long time.
As I wanted to be top dog, I used two of the most popular ranking services on WF on my site at no.5 and on both competitors sites at no1 and no2. I did this to ensure that if I went down, so did my competitors.
Today, after a little over 2 months, all those three sites that I bombarded with links have disappeared beyond 100 in the rankings for that keyword. My number three site is at no1.
To me, this proves with very little doubt the rumours lately that you can get competitors sites' penalized severely. This is scary.