You'd have to have got their ranking to number one with those links in the first place for that to work mate so the net effect is zero, except maybe to increase their traffic for a while. The point is that if you use weak ass techniques that fail to correctly mimic the signals that indicate genuine usefulness then you'll pay the price.
As for hurting competitors, this is a discussion I've had numerous times, it can be done, no two ways about that. Either that or it's impossible to hurt yourself..... Check this out - Google Bowling
Now you're starting to see why rankings are not the be all and end of all of SEO. Rankings fluctuate because of algo improvements and competitor activity and people may not even be seeing the same thing as you anyway due to personalised/geo targeted search so 'position' is actually a pretty meaningless and difficult to measure metric to go by. The stats that matter are how many visits result from a keyword phrase and what that traffic is actually doing on your site. I'd much rather have 20 page/one and two rankings than one #1 ranking, that gives a larger safety net and makes your SEO traffic that much more reslient AND if the rankings are built on genuinely good content or signals that mimic that then you're safer anyway. Again, it comes down to understanding what Google want.





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