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It is considered to one of the most dreaded penalties that can be levied by Google on a Webmaster for bad link practices. Known as -60 Penalty, it pushes the website of the penalized Webmaster 60 positions back in the search pages. This penalty is enforced mainly in the case of Paid Links, as they are considered to a be questionable tactic to gather links.
According to Search Engine Roundtable, it seems that Google is finally admitting to use of -60 penalty. There has been an ongoing thread in Google Groups regarding Google's use of -60 penalty, where Googler JohnMu has replied in a most nonchalant way, not addressing the -60 penalty issue directly but giving tips to cleaning up the site from a spam perspective.
In fact, after spending some time at the discussion, you get this feeling that Google is not trying to hide the -60 penalty anymore. Well, at least things are getting a little clearer, especially with all sorts of speculations flying everywhere.
