Alright cool... So if I was a newbie webmaster, and I bought links from Google adwords,
specifically an ad that said "Increase Your Rankings!", then Google penalizes my site for
links I bought through their advertising platform...
That's 100% A-Okay with all laws?
Damn, that means I can completely scam anyone I want and get away with it.
But you would not be buying the links from Google, you would be buying them from somebody who advertised on Google which is a very large difference. Kind of like blaming the newspaper for something you purchased from ad when you found out it was defective when who you really should be blaming the person you bought it from.
Now if Google sold you the links directly and then hammered you for using them that would be a different matter altogether but that is not what is happening.
Now am I surprised that Google sell ad space to companies selling links? A little but they allow that kind of thing in the organic results as well so not really all that much. I suppose they could remove all results that did anything they did not approve of but then everyone would be screaming censorship and that would be a much bigger public relations problem for them than a few seo guys jumping off buildings.