Earlier quoted context omitted.
Somebody posted a link to a detailed expose' on HN a few weeks ago detailing a successful negative SEO campaign to destroy a competing car dealer's rankings. I'll see if I can dig it up, but this kind of stuff is definitely going on - and people are specifically being paid to do it.
I think it was http://trafficplanet.com/topic/2372-successful-negative-seo-... (Comment by trevin https://news.ycombinator.com/item?id=5701104 )
Here's the problem with that: the site they selected was spamming, and Google had already taken action on that site. The site had been spamming for years; see e.g. http://growabrain.typepad.com/growabrain/2007/10/fiat-126.ht... for a spam comment pointing to justgoodcars.com from January of 2008. Here's another spam link from April 2008: http://www.punny.org/money/ditch-your-ancient-car-and-get-30... . Or check out this low-quality directory link from years ago: http://www.easyweblistonline.com/News___Media/Automotive/ Or this low-quality directory: http://www.whatclicks.com/shopping/automotive.html
Google found a bunch of spammy links like this dating back years and years, and we took manual webspam action regarding this site before this so-called "detailed expose" of negative SEO ever came out.
Like many of the reports of "successful negative SEO" that we've investigated, the claims didn't hold up. In this case, we had already caught the site in question for spammy links going back years and years--long before the negative SEO campaign started.