Matt Cutts: Gadgets, Google, and SEO » How to report paid links
This blogpost has me seeing red. Google has set up a mechanism to report paid links. Duh. You can usually tell it is a paid link by the underlying language of the link, or the lack thereof as in the case of TinyURL.
Nothing is done about the SPLOGS that populate the blogosphere and they are most often found by search engines. I wrote about a SPLOG network here.
So, the word is, no paid links or you will lose page rank. If you want to get even with someone, just report their blogs as containing paid links. Google must be practicing for when they have a total monopoly over search engine marketing. Not yet, Google...