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"Don't buy links".... so according to your logic, it would be possible to get your competition banned by buying links to their sites....
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It is a major grey area that is all up to Google's discretion. According to Google you are allowed to buy links for advertising purposes (these links should be no-follow), while it is against the rules to buy links for link juice. If you buy enough irrelevant links to alert them, or if you get really unlucky, then yes they will probably slap both parties with a hefty serps drop... but a full on banning would be extremely unlikely.
My rule of thumb is if you are going to buy links or sell link spots for link juice purposes, make sure the content is all relevant and related. This will make it appear more like a “credible source link” instead of a “bought link”.
Then again that is all for mainstream SEO, with adult Google doesn't differentiate between niches. It sees all adult as related content.