It is up to Google to prevent that. You can't do much about it (but laugh, as your competition is trying to frame you, when they could use that wasted time to focus on their own rankings). If it is really blatant, you could file a spam report [1], post on the webmaster forums [2] or disavow certain links [3].
Is there a way that person A could hurt competitor B?
We try really really hard to design algorithms that are
robust and resistant. Any algo that the search team has
done in the recent years, we do walk through those cases.
Can competitors harm ranking?
Google works hard to prevent other webmasters from being
able to harm your ranking or have your site removed from
our index.
Still, some webmasters do feel it is possible to do "negative SEO". For example the above quote used to read:
There's almost nothing a competitor can do to harm your
ranking or have your site removed from our index.
I myself wouldn't worry about competitors trying this. There is not much you can do to stop others from behaving a certain way. I think it is much more likely that Google detects these attempts, than a competitor finding a way to damage rankings that don't belong to them.
http://www.youtube.com/watch?feature=player_detailpage&v...
http://support.google.com/webmasters/bin/answer.py?hl=en&... Still, some webmasters do feel it is possible to do "negative SEO". For example the above quote used to read: I myself wouldn't worry about competitors trying this. There is not much you can do to stop others from behaving a certain way. I think it is much more likely that Google detects these attempts, than a competitor finding a way to damage rankings that don't belong to them.[1] https://www.google.com/webmasters/tools/spamreport?hl=en
[2] http://productforums.google.com/forum/#!forum/webmasters
[3] http://www.youtube.com/watch?v=393nmCYFRtA