A thread at WebmasterWorld suggests that a good competitive strategy is to sandbox your competitor. The thread creator said:

Now wouldn't it be in your best interest to sandbox your competition? You see a new site throwing up some PPC ads in your space, you immediately give them a few run-of-site links from some other sites you run and watch them get sandboxed.

My first reaction was the same reaction ciml, WebmasterWorld administrator wrote in message number 6:

It's an approach that is just as likely to help the competitor as it is to harm it, in my opinion.

As the member who posted before ciml said:

If they try and be agressive to rank, they will be sandboxed.

If they are not, they won't rank.

Eitherway you are safe.