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One of our competitors recently rocketed up the search rankings. A little investigation revealed it to be a clear-cut case of black hat SEO link farming. I submitted what I believe was a clear and comprehensive report to Google via Webmaster Tools a couple of weeks ago, but haven't seen any results yet.
How long should I wait before starting to worry that the matter may have fallen through the cracks? Should I resubmit the report?
Don't resubmit the report. That won't accomplish anything.
Google won't necessarily punish the offending site directly. They have expressed a preference for using reports like yours for identifying tricks and techniques (patterns) and updating their spam fighting algorithms to automatically handle this. This allows them to improve the whole system instead of just micro-managing one website. Other websites who do this will then also get caught in that net thus improving the search results as a whole.
Additionally, unless they can positively identify the linking sites as belonging to the same owner or otherwise being a linking scheme, they can run the risk of penalizing an innocent site. What's more likely to happen is the value of links on those sites may be questioned and potentially devalued.
In cases like JC Penney and BMW explicitly targeting one website for punishment was beneficial as it brought attention to black hat SEO and the big punishments that potentially await users who sink that low. But they are the exceptions rather then the rule.
