According to Matt Cutts the Penguin Penalty isn’t what Google consider a penalty but simply an Algorithm change. All semantics really but Matt Cutts in an interview at SMX (the Search Marketing Expo) certainly didn’t seem to suggest he or Google had any remorse for the Penguin update they unleashed earlier this year.
In an interview that will be fascinating to anyone with a passing interest in Search Engine Optimization Matt Cutts also confirms that there are no Penguin Updates yet despite what some think and it is data refreshes that have seen some sites recover, presumably where they have got rid of the links that were causing them problems.
The Penguin update of course has bought up question from observers about negative SEO and many site owners believe that their competitors have used this against them.
Google certainly have removed websites from results or given them a penalty, sorry the algorithm has drastically reduced their ranking, as a result of what Google sees as spam links. So how can Google tell the difference between a link maliciously placed on a bad neighborhood to one that a site owner has had placed there as part of a linking scheme?