Well, it is well known that a site will be penalized or can be suppressed by Google algorithms if they have engaged in negative SEO. Although, even Google knows that proper, effective negative SEO is extremely rare to come across. However, Google has admitted that negative SEO via linkbuilding is a very possible threat.
When Google released the Penguin update to their ranking algorithm in October 2012, they made it possible to detect negative SEO. This sparked an idea in a guy named Matt Cutts because he created a tool. Better known as the Disavow Tool, this allows the site owner to ask Google to not count links that they felt would cause harm to their site. Also, Cutts stated how the vast majority of sites would not have to use his tool as Google is extremely capable of figuring it out for themselves. However, when her released the statement”For the people who are in maybe super competitive poker, casino, whatever kind of niches and they’re worried about, ‘OK, what if someone is trying to do some ill will towards my site?’ we’ve just released a new tool called disavow links”, he was stating that it would be very useful to companies in high money, competitive niches.